FORM 10-Q

                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

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

      For the quarterly period ended JUNE 30, 2006

|_|   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

                                 WHX CORPORATION
             (Exact name of registrant as specified in its charter)

                DELAWARE                                         13-3768097
                --------                                         ----------
        (State of Incorporation)                                (IRS Employer
                                                             Identification No.)

        555 THEODORE FREMD AVENUE
              RYE, NEW YORK                                         10580
              -------------                                         -----
(Address of principal executive offices)                         (Zip code)

        Registrant's telephone number, including area code: 914-925-4413

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 |_|  No |X|

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

Large accelerated filer |_|   Accelerated filer |_|   Non-accelerated filer |X|

      Indicate  by check mark  whether  the  registrant  is a shell  company (as
defined in Rule 12b-2 of the Exchange Act).  Yes |_|  No |X|

      Indicate by check mark whether the  registrant has filed all documents and
reports  required  to be  filed by  Section  12,  13 or 15(d) of the  Securities
Exchange Act of 1934 subsequent to the  distribution of securities  under a plan
confirmed by a court.  Yes |_|  No |X|

The number of shares of Common Stock issued and outstanding as of March 26, 2007
was 10,000,498


                                       1


PART I. ITEM 1: FINANCIAL STATEMENTS

                                                       WHX CORPORATION
                                       CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                                                         (Unaudited)

                                                            Three Months Ended June 30,        Six Months Ended June 30,
                                                               2006             2005             2006             2005
                                                         ---------------- ---------------- ---------------- ----------------
                                                                         (in thousands - except per-share)

Net sales                                                    $ 125,223       $ 105,556       $ 237,984         $ 201,485

Cost of goods sold                                             101,704          85,012         193,056           162,681
                                                             ---------       ---------       ---------         ---------

Gross profit                                                    23,519          20,544          44,928            38,804

Selling, general and administrative expenses                    16,031          15,449          31,013            30,665
Environmental remediation expense                                 --              --             2,909              --
Gain (loss) on disposal of assets                                  (43)              5             (87)             --
Asset impairment charge                                          1,778            --             1,778              --
Restructuring charges                                            1,931            --             1,931              --
                                                             ---------       ---------       ---------         ---------

Income from operations                                           3,736           5,100           7,210             8,139
                                                             ---------       ---------       ---------         ---------

Other:
      Interest expense                                           5,365           3,807           9,948             9,266
      Chapter 11 and related reorganization expenses              --             3,123            --               4,624
      Realized and unrealized gain (loss) on derivatives           936            (130)         (4,530)             (453)
      Other income (loss)                                         (183)             78            (134)              130
                                                             ---------       ---------       ---------         ---------

Loss from continuing operations before taxes                      (876)         (1,882)         (7,402)           (6,074)

Tax provision                                                      696             490           1,234               863
                                                             ---------       ---------       ---------         ---------

Loss from continuing operations,net of tax                      (1,572)         (2,372)         (8,636)           (6,937)

Discontinued operations:
      Loss from discontinued operations, net of tax                167           1,553             167             3,484
                                                             ---------       ---------       ---------         ---------

Net loss                                                        (1,739)         (3,925)         (8,803)          (10,421)

Less: Dividend requirement for preferred stock                    --              --              --               3,561
                                                             ---------       ---------       ---------         ---------

Net loss applicable to common stock                          $  (1,739)      $  (3,925)      $  (8,803)        $ (13,982)
                                                             =========       =========       =========         =========

BASIC AND DILUTED PER SHARE OF COMMON STOCK

Loss  from continuing operations per share
     net of preferred dividends                              $   (0.16)      $   (0.43)      $   (0.86)        $   (1.92)
Discontinued operations                                          (0.02)          (0.29)          (0.02)            (0.64)
                                                             ---------       ---------       ---------         ---------

Net loss per share applicable to common stock                $   (0.17)      $   (0.72)      $   (0.88)        $   (2.56)
                                                             =========       =========       =========         =========

SEE NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


                                                              2


                                            WHX CORPORATION
                                 CONDENSED CONSOLIDATED BALANCE SHEETS
                                              (Unaudited)

                                                                         June 30,           December 31,
                                                                           2006                  2005
                                                                    ------------------   ------------------
ASSETS                                                                (Dollars and shares in thousands)
Current assets:
      Cash and cash equivalents                                         $   4,971            $   4,076
      Trade receivables - net                                              69,789               57,243
      Inventories                                                          59,777               60,978
      Current assets of discontinued operations                                43                  181
      Insurance receivable                                                   --                  2,000
      Deferred income taxes                                                   812                  812
      Assets held for sale                                                    885                 --
      Other current assets                                                  4,321                6,641
                                                                        ---------            ---------
                 Total current assets                                     140,598              131,931

Property, plant and equipment, at cost less
   accumulated depreciation and amortization                               87,906               91,150
Goodwill and other intangibles                                             50,035               50,048
Intangible pension asset                                                      586                  586
Long term assets of discontinued operations                                 1,394                2,794
Other non-current assets                                                   19,414               19,704
                                                                        ---------            ---------
                                                                        $ 299,933            $ 296,213
                                                                        =========            =========

LIABILITIES AND STOCKHOLDERS' (DEFICIT) EQUITY
Current liabilities:
      Trade payables                                                    $  54,327            $  49,274
      Accrued environmental liability                                      22,466               27,526
      Accrued liabilities                                                  27,815               31,064
      Current portion of long-term debt                                     3,718               23,127
      Current portion of long-term debt - related party                      --                 70,627
      Short-term debt                                                      51,794               51,080
      Deferred income taxes                                                   123                  123
      Current liabilities of discontinued operations                          144                  581
                                                                        ---------            ---------
                Total current liabilities                                 160,387              253,402

Long-term debt                                                             26,954                4,889
Long-term debt - related party                                             89,627                 --
Accrued pension liability                                                  10,008               16,216
Other employee benefit liabilities                                          8,056                8,761
Deferred income taxes                                                       3,184                3,048
Additional minimum pension liability                                       65,601               65,601
                                                                        ---------            ---------
                Total liabilities                                         363,817              351,917
                                                                        ---------            ---------

Stockholders' (deficit) equity:
     Preferred stock- $.10 par value; authorized 5,000
       shares; issued and outstanding -0- shares                             --                   --
    Common stock -  $.01 par value; authorized 40,000
      shares; issued and outstanding: 10,000 shares                           100                  100
    Warrants                                                                1,287                1,287
    Accumulated other comprehensive loss                                  (56,803)             (57,426)
    Additional paid-in capital                                            394,308              394,308
    Accumulated deficit                                                  (402,776)            (393,973)
                                                                        ---------            ---------
                Total stockholders' deficit                               (63,884)             (55,704)
                                                                        ---------            ---------
                                                                        $ 299,933            $ 296,213
                                                                        =========            =========

SEE NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


                                                   3


                                              WHX CORPORATION
                              CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                                (Unaudited)

                                                                                  Six Months Ended June 30,
                                                                                 2006                 2005
                                                                         ------------------   ------------------
                                                                                     (in thousands)
Cash flows from operating activities:
Net loss                                                                    $ (8,803)             $(10,421)
Adjustments to reconcile net loss to net cash
     provided by (used in) operating activities:
  Asset impairment charge                                                      1,778                  --
  Depreciation and amortization                                                6,559                 5,998
  Amortization of debt related costs                                           1,081                 1,093
  Other postretirement benefits                                                 (218)                  563
  Pension curtailment                                                            128                  --
  Equity in after-tax income of affiliated companies                            (134)                  (66)
  Chapter 11 and related reorganization expenses                                --                   4,624
  Payments of Chapter 11 and related reorganization expenses                    --                  (2,071)
  Unrealized gain on derivatives                                                (252)                 (182)
  Reclassification of net cash settlements on derivative instruments           4,782                   519
  Discontinued operations                                                       --                    (681)
  Other                                                                           90                    33
Decrease (increase) in working capital elements,
     net of effect of acquisitions:
      Trade receivables                                                      (12,275)              (14,199)
       Inventories                                                             1,358                (2,280)
       Other current assets                                                    1,970                (1,189)
       Other current liabilities                                              (7,520)               (1,709)
  Other items-net                                                               (398)                 (438)
  Discontinued operations                                                       (300)               11,466
                                                                            --------              --------
Net cash used in operating activities                                        (12,154)               (8,940)
                                                                            --------              --------
CASH FLOWS FROM INVESTING ACTIVITIES:
  Plant additions and improvements                                            (4,826)              (10,361)
  Proceeds from sales of assets                                                  139                    31
  Net cash settlements on derivative instruments                              (4,782)                 (519)
  Discontinued operations                                                      1,400                 1,186
                                                                            --------              --------
Net cash used in investing activities                                         (8,069)               (9,663)
                                                                            --------              --------
CASH FLOWS FROM FINANCING ACTIVITIES:
   Proceeds of Term Loan B - related party                                    19,000                  --
   Proceeds of term loans                                                      7,000                 2,330
   Net revolver borrowings (repayments)                                         (127)               11,732
   Proceeds (repayments) of term loans - Foreign                                (226)                 (232)
   Proceeds (repayments) of term loans - Domestic                             (4,529)               (3,039)
                                                                            --------              --------
Net cash  provided by financing activities                                    21,118                10,791
                                                                            --------              --------
NET CHANGE FOR THE PERIOD                                                        895                (7,812)

Cash and cash equivalents at beginning of period                               4,076                20,826
                                                                            --------              --------
CASH AND CASH EQUIVALENTS AT END OF PERIOD                                  $  4,971              $ 13,014
                                                                            ========              ========



SEE NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


                                                     4


NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTE 1 -THE COMPANY AND NATURE OF OPERATIONS

      WHX  Corporation,  the parent  company  ("WHX") is a holding  company that
invests in and manages a group of businesses that are managed on a decentralized
basis.  WHX's  primary  business  is  Handy  &  Harman  ("H&H"),  a  diversified
manufacturing  company whose strategic business units encompass three reportable
segments:  precious  metals,  wire and tubing,  and engineered  materials.  WHX,
together  with all of its  subsidiaries,  shall be  referred  to  herein  as the
"Company."

NOTE 2 - RECENT DEVELOPMENTS AND LIQUIDITY

      On December 27, 2006, WHX Corporation filed its Annual Report on Form 10-K
for the year ended December 31, 2005 (the "2005 10-K").  Since the filing of its
2005 10-K, the following significant events have occurred:

PENSION PLAN

      On December 20, 2006, the Internal  Revenue  Service granted a conditional
waiver  (the "IRS  Waiver")  of the  minimum  funding  requirements  for the WHX
Pension  Plan for the 2005 plan year in  accordance  with section 412 (d) of the
Internal  Revenue  Code and section 303 of the  Employee  Retirement  Income and
Security Act of 1974, as amended ("ERISA"),  and on December 28, 2006, WHX, H&H,
and the  Pension  Benefit  Guaranty  Corporation  (the  "PBGC")  entered  into a
settlement  agreement (the "PBGC  Settlement  Agreement") in connection with the
IRS  Waiver  and  certain  other  matters.  The IRS Waiver is subject to certain
conditions,  including a requirement  that the Company meet the minimum  funding
requirements  for the WHX Pension  Plan for the plan years  ending  December 31,
2006 through 2010, without applying for a waiver of such requirements.  The PBGC
Settlement  Agreement  and related  agreements  include the  following:  (i) the
amortization of the waived amount of $15.5 million (the "Waiver  Amount") over a
period of five years, (ii) the PBGC's consent to increase borrowings under H&H's
senior  credit  facility to $125  million in  connection  with the closing of an
acquisition  described below, (iii) the resolution of any potential issues under
Section  4062(e) of ERISA,  in  connection  with the  cessation of operations at
certain  facilities  owned  by WHX,  H&H or  their  subsidiaries,  and  (iv) the
granting  to the  PBGC  of  subordinate  liens  on the  assets  of H&H  and  its
subsidiaries,  and specified assets of WHX, to collateralize WHX's obligation to
pay the Waiver  Amount to the WHX Pension Plan and to make  certain  payments to
the WHX Pension  Plan in the event of its  termination.  As a result of the PBGC
Settlement  Agreement and the IRS Waiver, based on estimates from WHX's actuary,
the Company expects its minimum  funding  requirement for the specific plan year
and the  amortization of the 2005  requirement to be $13.1 million (paid in full
in 2006),  $10.8  million,  $11.0 million,  $8.9 million,  $7.0 million and $2.3
million (which amounts reflect the recent passage of the Pension  Protection Act
of 2006) in 2006, 2007, 2008, 2009, 2010 and 2011, respectively.

AMENDMENTS TO CREDIT AGREEMENTS

      On December 27, 2006,  Wachovia Bank,  National  Association  ("Wachovia")
provided  H&H with an  additional  $7.0  million  loan.  This was pursuant to an
amendment signed on October 30, 2006 which made the additional funds conditional
upon the filing of the Company's 2005 Annual Report on Form 10-K.

      On December 28, 2006, H&H and certain of H&H's subsidiaries  amended their
Loan and Security  Agreement with Wachovia and their Loan and Security Agreement
with Steel  Partners  II, L.P.  ("Steel")  (the  beneficial  holder of 5,029,793
shares of the Company's common stock,  representing  approximately  50.3% of the
outstanding  shares) to  provide,  in part,  for:  (i) the  consummation  of the
transactions  contemplated  by the PBGC  Settlement  Agreement and the waiver of
possible  events of  default  that may have  occurred  relating  to the  matters
covered  by the PBGC  Settlement  Agreement;  and (ii) a $42  million  term loan
funded by Ableco  Finance  LLC. A portion of the loan ($26  million) was used to
fund an acquisition  by H&H, $3.2 million was paid as a contribution  to the WHX
Pension Plan, and approximately $12 million of the loan was used to reduce H&H's
outstanding balance under its revolving credit facility.

      On March 29,  2007,  H&H and  certain of H&H's  subsidiaries  amended  the
respective Loan and Security  Agreements with Wachovia and Steel to, among other
things,  (i) amend the  definition  of  EBITDA,  (ii) reset the levels and amend
certain of the financial  covenants,  (iii) extend the  termination  date of the
credit  facilities  from  March  31,  2007 to June 30,  2008,  (iv)  permit  the
extension  by H&H to WHX of an  unsecured  loan  for  required  payments  to the


                                       5


pension plan, under certain  conditions,  and (v) permit the extension by H&H to
WHX of an unsecured loan for other uses in the aggregate principal amount not to
exceed $3.5 million under certain  conditions.  The amendments also provided for
the pledge of 65% of all  outstanding  securities of Indiana Tube Danmark A/S, a
Danish   corporation   and  a   wholly-owned   subsidiary   of  Handy  &  Harman
International,   Ltd.,  and  Protechno,   S.A.,  a  French   corporation  and  a
wholly-owned  subsidiary of Indiana Tube Danmark A/S.  Finally,  the  amendments
also provided for waivers of certain events of default  existing as of March 29,
2007.

ACQUISITIONS

      Pursuant to an Asset Purchase  Agreement (the "Asset Purchase  Agreement")
dated as of December 28, 2006, a subsidiary of H&H acquired a mechanical roofing
fastener business. The purchase price was approximately $26 million, including a
working capital  adjustment.  The assets acquired included,  among other things,
machinery, equipment, inventories of raw materials, work-in-process and finished
products,  certain  contracts,  accounts  receivable and  intellectual  property
rights,  all as related to the  acquired  business  and as provided in the Asset
Purchase Agreement.  This acquired business develops and manufactures  fastening
systems for the  commercial  roofing  industry.  WHX believes  this  acquisition
solidifies  its position as a leading  manufacturer  and supplier of  mechanical
fasteners,  accessories  and  components,  and  building  products for the North
American commercial and residential  construction industry. Funds for payment of
the purchase  price by H&H were  obtained  pursuant to the  aforementioned  term
loan.

      On April 12, 2007, Steel Partners II, L.P.  ("Steel"),  a Delaware limited
partnership,  and  WHX  entered  into a Stock  Purchase  Agreement  whereby  WHX
acquired  Steel's entire interest in BZ Acquisition  Corp.  ("BZA"),  a Delaware
corporation  and  wholly  owned  subsidiary  of Steel (the "BZA  Transfer")  for
$10.00.  In addition,  WHX agreed to reimburse all reasonable  fees and expenses
incurred by Steel in  connection  with the Offer and the Merger (each as defined
below). BZA is the acquisition subsidiary in a tender offer to acquire up to all
of  the  outstanding  stock  of  Bairnco  Corporation,  a  Delaware  corporation
("Bairnco") for $13.50 per share in cash. Steel  beneficially owns approximately
50.3% of WHX's outstanding common stock.

      Steel, BZA, and Bairnco entered into an Agreement and Plan of Merger dated
as of February 23, 2007 (the "Merger Agreement"),  pursuant to which BZA amended
its tender offer to acquire all of the outstanding common shares of Bairnco at a
price of $13.50  per share in cash  (the  "Offer").  In  addition,  all  Bairnco
shareholders  of record on March 5, 2007 continued to be entitled to receive the
declared first quarter  dividend of $0.10 per share,  for total cash proceeds of
$13.60 per share.  On April 13, 2007,  upon the expiration of the Offer pursuant
to the Merger  Agreement,  BZA acquired  approximately  88.9% of the outstanding
common stock of Bairnco.

      Pursuant to the Merger  Agreement,  on April 24, 2007, BZA was merged with
and into Bairnco with  Bairnco  continuing  as the  surviving  corporation  as a
wholly owned  subsidiary of WHX (the  "Merger").  At the  effective  time of the
Merger,  each Bairnco common share then outstanding  (other than shares owned by
BZA or its direct parent  entity,  shares owned by Bairnco as treasury stock and
shares held by stockholders  who properly  exercise their appraisal  rights) was
automatically  converted  into the  right to  receive  $13.50  per share in cash
without interest and subject to applicable withholding taxes.  Immediately prior
to the  Merger,  BZA held  approximately  90.1%  of the  outstanding  shares  of
Bairnco.  The  proceeds  required  to fund  the  closing  of the  Offer  and the
resulting Merger and to pay related fees and expenses were approximately  $101.5
million.

      In  connection  with the  closing  of the  Offer,  initial  financing  was
provided by Steel through two facilities.  Steel extended to BZA bridge loans in
principal amount of approximately $75.1 million, $1.4 million, and $10.0 million
(and  may  extend  additional  loans of  approximately  $3.6  million,  up to an
aggregate  total amount of borrowings of $90.0  million)  pursuant to a Loan and
Security  Agreement (the "Bridge Loan Agreement"),  between BZA and Bairnco,  as
borrowers,  and Steel,  as lender.  In addition,  Steel  extended to WHX a $15.0
million  subordinated  loan, which is unsecured at the WHX level,  pursuant to a
Subordinated Loan and Security Agreement (the "Subordinated Loan Agreement" and,
together with the Bridge Loan Agreement, the "Loan Agreements"), between WHX, as
borrower,  and Steel, as lender.  WHX contributed the $15.0 million  proceeds of
the subordinated loan to BZA as a capital contribution.

      The Bridge  Loan  Agreement  provides  for bridge  term loans of up to $90
million  from  Steel to BZA,  which  were  assumed by Bairnco as a result of the
Merger.  Borrowings  under the Bridge Loan Agreement bear (i) cash interest at a
rate per annum  equal to the prime  rate of JP Morgan  Chase plus 1.75% and (ii)
pay-in-kind interest at a rate per annum equal to 4.5% for the first 90 days the
initial  loan is  outstanding  and 5%  (instead  of 4.5%) for the balance of the


                                       6


term, each as adjusted from time to time. The minimum aggregate interest rate on
borrowings  under the Bridge Loan  Agreement is 14.5% per annum for the first 90
days the initial loan is  outstanding,  and 15% (instead of 14.5%) per annum for
the balance of the term, and the maximum  aggregate  interest rate on borrowings
under the Bridge Loan Agreement is 18% per annum. The cash interest rate and the
pay-in-kind  interest  rate may be adjusted  from time to time,  by agreement of
Steel and  Bairnco,  so long as the  aggregate  interest  rate remains the same.
Interest  is  payable  monthly in  arrears.  Obligations  under the Bridge  Loan
Agreement are guaranteed by certain of Bairnco's  subsidiaries  and secured by a
junior lien on the assets of Bairnco and certain of its subsidiaries and capital
stock of certain of Bairnco's  subsidiaries.  Obligations  under the Bridge Loan
Agreement  are  also  guaranteed  by the  Company  on an  unsecured  basis.  The
scheduled  maturity date of the indebtedness  under the Bridge Loan Agreement is
the earlier to occur of (i) June 30, 2008 and (ii) such time as Bairnco  obtains
any replacement  financing.  Indebtedness under the Bridge Loan Agreement may be
prepaid without penalty or premium.

      The Subordinated  Loan Agreement  provides for a subordinated term loan of
$15 million from Steel to WHX,  which is unsecured at the WHX level.  Borrowings
under the Subordinated  Loan Agreement bear  pay-in-kind  interest at a rate per
annum equal to the prime rate of JP Morgan Chase plus 7.75%,  adjusted from time
to time,  with a minimum  interest rate of 16% per annum and a maximum  interest
rate of 19% per annum. Interest is payable monthly in arrears. Obligations under
the  Subordinated  Loan  Agreement are  guaranteed by Bairnco and certain of its
subsidiaries  and  secured by a junior lien on the assets of Bairnco and certain
of its subsidiaries and capital stock of certain of Bairnco's subsidiaries.  The
indebtedness  under the  Subordinated  Loan  Agreement will mature on the second
anniversary of the issuance of the subordinated  loan and may be prepaid without
penalty or premium.

      The  Loan  Agreements  contain  customary   representations,   warranties,
covenants,  events of default and indemnification  provisions.  The indebtedness
under  the  Bridge  Loan  Agreement  and  the  related  security   interests  is
subordinated to the indebtedness and related  security  interests  granted under
Bairnco's  existing  senior  credit  facility  with Bank of  America,  N.A.  The
guarantees of the  indebtedness  under the  Subordinated  Loan Agreement and the
related  security  interests is  subordinated to all  indebtedness  and security
interests described in the preceding sentence.

Bairnco  operates  two  core  businesses  -  Arlon  and  Kasco.  Arlon  designs,
manufactures,  and sells engineered materials and components for the electronic,
industrial  and  commercial  markets.  Kasco is a leading  provider of meat-room
products  and  maintenance  services  for  the  meat  and  deli  departments  of
supermarkets;  restaurants;  meat,  poultry  and  fish  processing  plants;  and
manufacturers   and  distributors  of  electrical  saws  and  cutting  equipment
throughout North America,  Europe, Asia and South America. WHX believes that the
acquisition of Bairnco will be beneficial  because of Bairnco's strong positions
in niche engineered  materials markets, and that it will improve Bairnco's plant
level  operations,  increase  profit margins and improve  working  capital.  The
results of  operations  and assets of Bairnco will be included in the  financial
statements of WHX beginning in the second quarter of 2007.

SALE OF ASSETS

      On March 4, 2007, the Company sold certain assets,  including the land and
building,  certain machinery and equipment,  and inventory of its Handy & Harman
Electronic Materials Corporation subsidiary,  located in East Providence,  Rhode
Island,  as well as  certain of its assets  and  inventory  located in  Malaysia
(collectively  referred to as "HHEM") for net  proceeds  of  approximately  $3.9
million.  In December 2006, the Company recorded an asset  impairment  charge of
$3.4 million  relating to the long-lived  assets offered for sale, in accordance
with SFAS No. 144,  "Accounting  for the  Impairment  or Disposal of  Long-Lived
Assets".  The amount of the  impairment  loss was based upon the actual  selling
price of the long-lived  assets in March 2007. In the Company's balance sheet as
of December 31, 2006,  the long-lived  assets were  classified as current assets
held for sale.  Due to the charge for the long-lived  asset  impairment in 2006,
the Company  recognized  no gain or loss upon sale of the  long-lived  assets in
2007. However, upon sale, the Company recognized a loss of $0.9 million relating
to the sale of  inventory.  The  Company  has  retained  responsibility  for any
environmental conditions requiring remediation at the HHEM site.

LIQUIDITY

      On March 7, 2005,  WHX filed a  voluntary  petition  to  reorganize  under
Chapter 11 of the United States  Bankruptcy  Code.  WHX continued to operate its
businesses and own and manage its properties as a debtor-in-possession under the
jurisdiction  of the  bankruptcy  court until it emerged from  protection  under
Chapter 11 of the Bankruptcy Code on July 29, 2005. WHX's Bankruptcy  Filing was
primarily intended to reduce WHX's debt, simplify its capital structure,  reduce
its  overall  cost of  capital  and  provide  it with  better  access to capital
markets.


                                       7


      Throughout 2005 and 2006, the Company experienced  liquidity issues, which
are  more  fully  described  in  Notes  1a and 2 to the  consolidated  financial
statements  included  in the  Annual  Report  on Form  10-K for the  year  ended
December  31,  2005.  The  Company  incurred  consolidated  net  losses of $34.7
million,  $140.4  million and $159.9  million for the years ended  December  31,
2005, 2004 and 2003,  respectively,  and had negative cash flows from operations
of $5.0  million and $39.6  million for the years  ended  December  31, 2005 and
2004,  respectively.  As of December  31, 2005,  the Company had an  accumulated
deficit of $394.0  million  and a working  capital  deficit  of $121.5  million.
Additionally,  the Company has not been in  compliance  with certain of its bank
covenants.  Note 1A to the  consolidated  financial  statements  included in our
Annual  Report on Form 10-K for the year ended  December  31,  2005  describes a
number of conditions concerning the Company's liquidity difficulties, and states
that these conditions  raise  substantial  doubt about the Company's  ability to
continue as a going concern.

      WHX is a  holding  company  and  has as  its  sole  source  of  cash  flow
distributions  from  its  operating  subsidiaries,  H&H and  Bairnco,  or  other
discrete  transactions.  H&H's bank credit facilities and term loans effectively
do not permit it to transfer any cash or other assets to WHX (with the exception
of  unsecured  loans to be used to make  required  contributions  to the pension
plan, and for other uses of an unsecured loan in the aggregate  principal amount
not to exceed $3.5 million under certain conditions),  and are collateralized by
substantially all of H&H's assets. Bairnco's revolving credit facility with Bank
of  America,  N.A  permits   distributions  by  Bairnco  to  WHX  under  certain
conditions.  WHX has no bank credit facility of its own. WHX's ongoing operating
cash flow requirements  consist of funding the minimum  requirements for the WHX
Pension Plan and paying other administrative costs.

      Since  emerging from  bankruptcy,  due to covenant  restrictions  in H&H's
credit  facilities,  there  have  been no  dividends  from H&H to WHX and  WHX's
sources of cash flow have consisted of:

         o  The issuance of $5.1 million in preferred  stock by a newly  created
            subsidiary (WHX CS Corp.) in October 2005, which was invested in the
            equity of a public company (Cosine Communications Inc.); and

         o  partial payment of the H&H subordinated debt to WHX of $9.0 million,
            which  required the approval of the banks  participating  in the H&H
            bank facility. Subsequent to this transaction in 2006, the remaining
            intercompany  loan balance of the subordinated debt of $44.2 million
            was converted to equity.

         o  As permitted by the March 29, 2007  Amendment and Waiver to the Loan
            and Security  Agreements,  an  unsecured  loan from H&H for required
            payments to the  pension  plan,  and for other uses of an  unsecured
            loan in the  aggregate  principal  amount not to exceed $3.5 million
            under certain conditions.

         o  A  $15.0  million   subordinated  loan  from  Steel  pursuant  to  a
            Subordinated  Loan and Security  Agreement between WHX, as borrower,
            and Steel,  as lender.  WHX used the $15.0  million  proceeds of the
            subordinated loan as a capital contribution to acquire Bairnco.

      As of December 31, 2006, WHX and its unrestricted subsidiaries had cash of
approximately  $0.8  million  and  current  liabilities  of  approximately  $7.5
million,  including  $5.1 million of  mandatorily  redeemable  preferred  shares
payable  to a related  party.  H&H's  availability  under its  revolving  credit
facility and other  facilities  as of December 31, 2006 was $19.1 million and as
of March  31,  2007,  was  approximately  $15.5  million.  All such  facilities,
including  the term  loans,  were set to expire on March 31, 2007  (although  by
amendment signed on March 29, 2007, were extended until June 30, 2008).

      In  connection  with the  closing of the  Bairnco  Offer and the Merger on
April  24,  2007,  Bairnco  became a  wholly-owned  subsidiary  of WHX.  Initial
financing was provided by Steel through two facilities,  as discussed  above, in
the approximate  aggregate  amount of $101.5 million.  In addition,  the Bairnco
Revolving  Credit  Facility  was amended to permit the closing of the Merger and
related  financing  transactions.  The availability  under the Bairnco Revolving
Credit Facility on March 31, 2007 was approximately  $12.0 million.  The Bairnco
Revolving Credit Facility permits  distributions by Bairnco to WHX under certain
conditions, as described in Note 21 to the consolidated financial statements.

      In addition to the obligations  under the current credit  facilities,  the
Company also has significant cash flow obligations, including without limitation
the  amounts due for the WHX  Pension  Plan (as  amended by the PBGC  Settlement
Agreement  entered into December 28, 2006).  There can be no assurance  that the


                                       8


funds  available  from  operations  and  under  its  credit  facilities  will be
sufficient to fund pension  funding  requirements,  debt service costs,  working
capital demands and environmental remediation costs. Additionally,  there can be
no assurances that the Company will be able to obtain  replacement  financing at
commercially  reasonable  terms upon the  expiration  of the H&H and Bairnco
credit facilities in June 2008.

      Nevertheless, as discussed further below, the Company believes that recent
new and amended  financing  arrangements,  acquisitions,  the IRS Waiver and the
PBGC Settlement Agreement,  the sale of a non-essential  operating unit, as well
as recent improvements in its core operations, and the substantial completion of
a major  remediation of property relating to certain  environmental  liabilities
should  permit the Company to generate  sufficient  working  capital to meet its
obligations  as they  mature  over the next  twelve  months.  The ability of the
Company to meet its cash  requirements  over this time period is  dependent,  in
part, on the Company's  ability to meet its business plan.  Management  believes
that  existing  capital  resources  and  sources  of credit,  including  the H&H
facilities  and the  Bairnco  facilities,  are  adequate to meet its current and
anticipated cash requirements.  The Company also continues to examine all of its
options  and  strategies,   including  acquisitions,   divestitures,  and  other
corporate transactions, to increase cash flow and stockholder value. However, if
the Company's  cash needs are greater than  anticipated  or the Company does not
materially  satisfy  its  business  plan,  the  Company  may be required to seek
additional or alternative financing sources. There can be no assurance that such
financing will be available or available on terms acceptable to the Company.

      As  more  fully  described  earlier  in  this  "Recent   Developments  and
Liquidity"  note to these  financial  statements,  the  Company  has  taken  the
following  actions which it believes will improve liquidity and help provide for
adequate  liquidity  to fund the  Company's  capital  needs for the next  twelve
months.

  o   On December 20, 2006,  the IRS granted a  conditional  waiver of the $15.5
      million minimum funding  requirement for the WHX Pension Plan for the 2005
      plan year and on December  28, 2006,  WHX,  H&H, and the PBGC entered into
      the PBGC  Settlement  Agreement  in  connection  with the IRS  Waiver  and
      certain other matters.  As a result of the PBGC  Settlement  Agreement and
      the IRS Waiver, based on estimates from WHX's actuary, the Company expects
      its  minimum  funding  requirement  for the  specific  plan  year  and the
      amortization of the 2005  requirement to be $13.1 million (paid in full in
      2006), $10.8 million,  $11.0 million,  $8.9 million, $7.0 million and $2.3
      million  (which  amounts   reflect  the  recent  passage  of  the  Pension
      Protection  Act of  2006) in  2006,  2007,  2008,  2009,  2010  and  2011,
      respectively.

  o   Availability  under H&H's Loan and Security  Agreements'  revolving credit
      facility as of December  31, 2006 was $19.1  million,  and as of March 31,
      2007,  was  approximately  $15.5  million.  On March  29,  2007,  all such
      facilities, including the term loans, were amended to (i) redefine EBITDA,
      (ii) reset the levels and amend certain of the financial covenants,  (iii)
      extend the termination  date of the credit  facilities from March 31, 2007
      to June 30, 2008,  (iv) permit the extension by H&H to WHX of an unsecured
      loan for required payments to the pension plan, under certain  conditions,
      and (v) permit the extension by H&H to WHX of an unsecured  loan for other
      uses in the  aggregate  principal  amount not to exceed $3.5 million under
      certain conditions.

  o   Following  the closing of the Bairnco  Merger,  upon the  satisfaction  of
      certain conditions,  Bairnco is permitted to make distributions to WHX. As
      of March  31,  2007,  availability  under  the  Bairnco  Revolving  Credit
      Facility was approximately  $12.0 million,  although there is no assurance
      that such amount will be available in the future,  or if  available,  that
      Bairnco will satisfy the conditions for distributing this amount to WHX.

  o   The  acquisition by a subsidiary of H&H of a mechanical  roofing  fastener
      business  for  approximately  $26  million,  including  a working  capital
      adjustment,  on December  28,  2006,  which we believe  will prove to be a
      valuable  acquisition  which will  solidify  H&H's  position  as a leading
      manufacturer  and  supplier  of  mechanical  fasteners,   accessories  and
      components,  and building  products for the North American  commercial and
      residential construction industry.

  o   The  sale in  March  2007  of a  non-core  business  which  had  generated
      operating losses in the past year.

  o   The substantial  completion of remediation of property relating to certain
      environmental liabilities.


                                       9


      In view of the matters described in the preceding  paragraphs,  management
believes that the Company has the ability to meet its financing  requirements on
a continuing  basis.  However,  if the  Company's  fiscal 2007 planned cash flow
projections  are not met,  management  could  consider the  reduction of certain
discretionary expenses and sale of certain assets. In the event that these plans
are not sufficient and the Company's  credit  facilities are not available,  the
Company's ability to operate could be adversely affected.

NOTE 3 - BASIS OF PRESENTATION

      The unaudited condensed  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 generally accepted accounting  principles 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 contained in Form 10-K for the year
ended  December  31,  2005.  Certain  amounts  for  the  prior  year  have  been
reclassified to conform to the current year presentation.

      During  the  three and six  month  period  ended  June 30,  2005,  WHX was
operating its businesses as a debtor-in-possession under the jurisdiction of the
bankruptcy court. Thus, the financial  statements covering this period which are
included herein have been prepared in accordance with the American  Institute of
Certified Public Accountants Statement of Position 90-7 ("SOP 90-7"), "Financial
Reporting  by  Entities  in  Reorganization   under  the  Bankruptcy  Code."  In
accordance with SOP 90-7,  revenues,  expenses,  realized gains and losses,  and
provisions for losses resulting from the reorganization are reported  separately
as  Chapter  11 and  related  reorganization  expenses,  net  in  the  unaudited
condensed  consolidated  statements of operations.  Cash used for Chapter 11 and
related  reorganization  expenses  is  disclosed  separately  in  the  unaudited
condensed  consolidated statement of cash flows. The Company did not qualify for
fresh-start  reporting  under the guidance in SOP 90-7 upon its  emergence  from
bankruptcy.

      In the opinion of management, the interim financial statements reflect all
normal and recurring  adjustments  (except for the accounting required under SOP
90-7  related  to  the  Bankruptcy  Filing)  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 generally accepted accounting  principles 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 six  months  ended  June 30,  2006 are not
necessarily indicative of the operating results for the full year.

      During  the  period  March 7, 2005  through  June 30,  2005,  while it was
reorganizing,  WHX stopped  recognizing  interest on its  10-1/2%  Senior  Notes
(approximately  $3.1  million of  interest)  and also  stopped  recognizing  the
cumulative  dividends  on its  preferred  stock  (approximately  $6.3 million of
dividends  would have accrued).  As of the Effective  Date, the Senior Notes and
Preferred  Stock were deemed  cancelled and annulled;  consequently,  no further
interest or dividends were recognized after March 7, 2005.

NOTE 4 - RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

      In February  2007,  the FASB issued  Statement of  Financial  Accounting
Standards No. 159,  "The Fair Value Option for Financial  Assets and Financial
Liabilities"  (SFAS No.  159).  SFAS No.  159  permits  entities  to choose to
measure  many  financial  instruments  and certain  other items at fair value.
SFAS No. 159 is effective  for  financial  statements  issued for fiscal years
beginning  after  November 15, 2007.  The Company is currently  evaluating the
impact of adopting  SFAS No. 159 on its  consolidated  financial  position and
results of operations.

      On September 29, 2006 , the FASB issued Statement of Financial  Accounting
Standards No. 158, "Employers'  Accounting for Defined Benefit Pension and Other
Postretirement  Plans"  (SFAS No. 158) which amends SFAS No. 87 and SFAS No. 106
to require  recognition of the  overfunded or underfunded  status of pension and
other  postretirement  benefit plans on the balance  sheet.  Under SFAS No. 158,
gains and losses,  prior service costs and credits, and any remaining transition
amounts  under  SFAS No. 87 and SFAS No.  106 that have not yet been  recognized
through net  periodic  benefit  cost will be  recognized  in  accumulated  other
comprehensive  income,  net  of tax  effects,  until  they  are  amortized  as a
component of net periodic  cost.  SFAS No. 158 is  effective  for  publicly-held


                                       10


companies  for fiscal  years ending after  December  15, 2006.  WHX  Corporation
adopted the balance sheet recognition provisions of SFAS No. 158 at December 31,
2006.  At that date,  our balance  sheet  reflected a reduction  in  shareholder
equity of  approximately  $49.3 million due to our defined  benefit  pension and
other postretirement  benefit plans. The new provisions of SFAS No. 158 resulted
in an  additional  $1.2  million  reduction to WHX  Corporation's  shareholders'
equity at  December  31,  2006.  The  Statement  does not affect the  results of
operations.

      In September 2006, the SEC staff issued Staff Accounting Bulletin No. 108,
"Considering   the  Effects  of  Prior  Year   Misstatements   when  Quantifying
Misstatements in Current Year Financial Statements" ("SAB No. 108"). SAB No. 108
was issued in order to  eliminate  the  diversity  of practice  surrounding  how
public  companies  quantify  financial  statement  misstatements.   It  requires
quantification of financial statement  misstatements based on the effects of the
misstatements  on  each  of  the  company's  financial  statements  and  related
financial statement  disclosures.  The provisions of SAB No. 108 must be applied
to annual financial statements no later than the fiscal year ending November 15,
2006.  The  Company  has  determined  that SAB No.  108 does not have a material
impact on its financial statements.

      In September  2006, the FASB issued  Statement of Financial  Standards No.
157, "Fair Value  Measurements" (SFAS No. 157). SFAS No. 157 defines fair value,
establishes a framework for measuring fair value in accordance  with  accounting
principles  generally  accepted in the United  States,  and expands  disclosures
about fair value  measurements.  This  statement  does not  require any new fair
value  measurements;  rather,  it applies under other accounting  pronouncements
that require or permit fair value  measurements.  The provisions of SFAS No. 157
are effective for fiscal years beginning after November 15, 2007. The Company is
currently  evaluating  the  impact  of SFAS  #157 on its  consolidated  financial
position and results of operations.

      In June  2006,  the  FASB  issued  Financial  Accounting  Standards  Board
Interpretation   No.  48,  "Accounting  for  Uncertainty  in  Income  Taxes,  an
Interpretation  of SFAS  Statement  109"  (FIN  No.  48),  which  clarifies  the
accounting for uncertainty in tax positions.  This Interpretation  provides that
the  tax  effects  from an  uncertain  tax  position  can be  recognized  in the
financial  statements,  only if the  position  is more  likely than not of being
sustained  on  audit,  based  on  the  technical  merits  of the  position.  The
provisions of FIN No. 48 are effective as of the beginning of fiscal 2007,  with
the  cumulative  effect of the change in  accounting  principle  recorded  as an
adjustment  to  opening  retained  earnings.  The  Company  does not  expect the
adoption of FIN No. 48 to have a material impact on its  consolidated  financial
position or results of operations.

NOTE 5- EARNINGS/LOSS PER SHARE

      The  computation  of basic earnings or loss per common share is based upon
the  weighted  average  number of shares of Common  Stock  outstanding.  Diluted
earnings per share gives effect to dilutive  potential common shares outstanding
during the period.

      As a result of the Company's emergence from bankruptcy, there were changes
to the authorized and outstanding  common stock of WHX. Prior to emergence,  the
Company had 5,522,926  preferred and 5,485,856 common shares  outstanding.  Upon
emergence  from  bankruptcy,  holders  of the  Company's  10 1/2%  Senior  Notes
received  9,200,000 shares of common stock in full and complete  satisfaction of
all claims,  in exchange  for the  extinguishment  of this debt.  The  preferred
stock,  with a carrying value of $267 million,  was extinguished  upon emergence
from bankruptcy in exchange for the residual shares of common stock outstanding,
(800,485 shares), plus warrants to purchase an additional 752,688 common shares.
Holders of the  pre-bankruptcy  common stock received no distribution  under the
Plan,  and all stock  option  plans  previously  in effect  were  cancelled  and
annulled.

      As of June 30, 2005,  outstanding  stock options to purchase  common stock
granted to officers, directors, and key employees totaled 1.3 million shares. In
the  computation  of diluted  loss per  common  share in the three and six month
periods ended June 30, 2005, the conversion of preferred  stock, the exercise of
options to purchase  common stock,  and the  inclusion of non-vested  restricted
stock awards would have had an anti-dilutive effect.

A reconciliation of the income and shares used in the computation follows:


                                       11


RECONCILIATION OF INCOME/(LOSS) AND SHARES IN EPS CALCULATION

(in thousands except per share amounts)

                                                   For the Three Months Ended June 30, 2006
                                                     Loss           Shares         Per-Share
                                                 (Numerator)     (Denominator)       Amount
                                               --------------- ---------------- ----------------

Net loss                                           $(1,739)
Less: Preferred stock dividends                       --
                                                   --------

BASIC AND DILUTED EPS
Loss applicable to common stockholders             $(1,739)         10,000          $  (0.17)
                                                   ========         ======          ========


                                                   For the Three Months Ended June 30, 2005
                                                     Loss           Shares         Per-Share
                                                 (Numerator)     (Denominator)       Amount
                                               --------------- ---------------- ----------------

Net loss                                           $(3,925)
Less: Preferred stock dividends                       --
                                                   --------
BASIC AND DILUTED EPS
Loss applicable to common stockholders             $(3,925)          5,466          $  (0.72)
                                                   ========         ======          ========


                                                   For the Six Months Ended June 30, 2006
                                                     Loss           Shares         Per-Share
                                                 (Numerator)     (Denominator)       Amount
                                               --------------- ---------------- ----------------

Net loss                                           $(8,803)
Less: Preferred stock dividends                       --
                                                   --------

BASIC AND DILUTED EPS
Loss applicable to common stockholders             $(8,803)         10,000          $  (0.88)
                                                   ========         ======          ========


                                                   For the Six Months Ended June 30, 2005
                                                     Loss           Shares         Per-Share
                                                 (Numerator)     (Denominator)       Amount
                                               --------------- ---------------- ----------------

Net loss                                           $(10,421)
Less: Preferred stock dividends                       3,561
                                                   --------

BASIC AND DILUTED EPS
Loss applicable to common stockholders             $(13,982)         5,463          $  (2.56)
                                                   ========          =====          ========

STOCK BASED COMPENSATION

      The  effect  on net  loss  and  loss  per  share  if WHX had  applied  the
fair-value recognition provisions of Statement of Financial Accounting Standards
("SFAS") No. 123,  "Accounting  for  Stock-Based  Compensation",  to stock-based
compensation  for the three and six months ended June 30, 2005 was not material.
Stock  option plans were in effect  until WHX emerged  from  bankruptcy  in July
2005. In accordance with the Plan of Reorganization, all such stock option plans
were cancelled and annulled.

PREFERRED STOCK DIVIDENDS AND INTEREST

      Subsequent  to WHX's  voluntary  petition for  reorganization  on March 7,
2005, WHX stopped recognizing the cumulative dividends on its preferred stock as
of the date of its bankruptcy  filing  (approximately  $6.3 million of dividends
would have been accrued for the period March 7, 2005 through June 30, 2005). WHX
also stopped  recognizing  interest on its 10-1/2%  Senior Notes  (approximately
$3.1 million of interest for the period March 7, 2005 through June 30, 2005).


                                       12


      At  June  30,  2005,  dividends  in  arrears  to  Series  A and  Series  B
Convertible  Preferred  Shareholders  were  $37.1  million  and  $49.0  million,
respectively.  Upon emergence from bankruptcy, all shares of preferred stock and
accrued dividends were deemed cancelled and annulled.

NOTE 6 - COMPREHENSIVE INCOME (LOSS)

Comprehensive income (loss) for the three and six-months ended June 30, 2006 and
2005 is as follows:

(in thousands)                                            Three Months Ended           Six Months Ended
                                                              June 30,                     June 30,
                                                       2006            2005          2006            2005
                                                   -------------- -------------- -------------  --------------

Net loss                                             $ (1,739)      $ (3,925)      $ (8,803)       $(10,421)

Other comprehensive loss:
   Foreign currency translation adjustments               672           (733)           623          (1,167)
                                                     --------       --------       --------        --------

Comprehensive loss                                   $ (1,067)      $ (4,658)      $ (8,180)       $(11,588)
                                                     ========       ========       ========        ========

Accumulated other  comprehensive  income (loss) balances as of June 30, 2006 and
December 31, 2005 were comprised as follows:

(in thousands)
                                                     June 30,       December 31,
                                                       2006            2005
                                                 ---------------- ---------------

Minimum pension liability adjustment                $(59,754)         $(59,754)

Foreign currency translation adjustment                2,951             2,328
                                                    --------          --------

                                                    $(56,803)         $(57,426)
                                                    ========          ========

NOTE 7 - INVENTORIES

      Inventories  at June 30,  2006 and  December  31,  2005 are  comprised  as
follows:

(in thousands)
                                                                        June 30,      December 31,
                                                                          2006            2005
                                                                    ---------------- ---------------

Finished products                                                      $ 18,770        $ 17,804
In-process                                                                8,292           4,851
Raw materials                                                            17,108          19,226
Fine and fabricated precious metal in various stages of completion       24,678          24,266
                                                                       --------        --------
                                                                         68,848          66,147
LIFO reserve                                                             (9,071)         (5,169)
                                                                       --------        --------
                                                                       $ 59,777        $ 60,978
                                                                       ========        ========


                                       13


      In order to  produce  certain  of its  products,  the  Company  purchases,
maintains and utilizes  precious  metals  inventory.  H&H enters into  commodity
futures and  forwards  contracts  on precious  metals that are subject to market
fluctuations  in order to  economically  hedge  its  precious  metals  inventory
against  price  fluctuations.   As  these  derivatives  are  not  designated  as
accounting hedges under Statement of Financial Accounting Standards ("SFAS") No.
133,  they  are  accounted  for  as  derivatives  with  no  hedge   designation.
Accordingly,  the Company marks to market the derivative  instruments related to
precious metals.  Such mark to market adjustments are recorded in current period
earnings as other income or expense in the Company's  consolidated  statement of
operations.  The quarter and six month  periods  ending June 30, 2006  include a
gain of $0.9 million and a loss of $4.5 million, respectively, relating to these
adjustments.  In 2005, the quarter and six month periods included losses of $0.1
million and $0.5 million,  respectively.  In addition,  the Company  records its
precious metal  inventory at LIFO cost,  subject to lower of cost or market with
any adjustments  recorded  through cost of goods sold.  Operating income for the
quarter and six month  periods  ending June 30, 2006 include a credit to cost of
goods sold of $1.1 million and $1.8 million, respectively,  from the liquidation
of  precious  metal  inventories  valued at LIFO cost.  The market  value of the
precious  metal  inventory  exceeded  LIFO value cost by $9.1  million  and $5.2
million at June 30, 2006 and December 31, 2005, respectively.

      Certain  customers  and suppliers of H&H choose to do business on a "toll"
basis, and furnish precious metal to H&H for return in fabricated form (customer
metal)  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 this toll precious metal is not included in the
Company's balance sheet.

The following  table  summarizes  customer-owned  and H&H-owned  precious  metal
quantities:

                                      June 30, 2006        December 31, 2005
                                -----------------------  ----------------------
   Silver ounces:
     Customer metal                      122,509                 79,442
     H&H owned metal                   1,536,086              1,537,900

   Gold ounces:
     Customer metal                          360                    305
     H&H owned metal                      12,739                 19,417

   Palladium ounces:
     Customer metal                        1,338                  1,060
     H&H owned metal                       2,161                  2,161

Market value per ounce:
      Silver                           $  10.931              $   8.910
      Gold                             $  614.09              $  516.00
      Palladium                        $  312.00              $  255.00

NOTE 8 - ASSET IMPAIRMENT, RESTRUCTURING CHARGES AND DISCONTINUED OPERATIONS

NORRISTOWN FACILITY

      On May 9, 2006,  the Company  announced  the closing of the Handy & Harman
Tube Co. ("HHT") located in Norristown,  Pennsylvania., which is included in the
Company's  Tubing  segment.  The decision to close the  Norristown  facility was
principally  based on the economics of operating HHT's business at the facility.
HHT manufactured stainless steel tubing that was supplied in various lengths and
forms in both coil and straight  lengths.  HHT's coil  business was relocated to
H&H's Camdel Metals Corporation ("Camdel") facility located in Camden, Delaware.
HHT's  machinery  and  equipment and real property at the site are being offered
for sale.

      In  conjunction  with the decision to close the Norristown  facility,  the
Company  reviewed the  recoverability  of the  Norristown  long-lived  assets in
accordance  with  SFAS No.  144,  "Accounting  for  Impairment  or  Disposal  of
Long-Lived Assets". A review of future cash flows, based on the expected closing
date,  indicated that cash flows would be  insufficient  to support the carrying
value of certain machinery and equipment at Norristown. As a result, the Company
recorded  an  asset  impairment  charge  of $1.8  million  in its  statement  of


                                       14


operations for the second quarter of 2006. Certain of the Norristown  long-lived
assets,   principally   consisting  of  machinery  and   equipment,   have  been
reclassified to current assets held for sale in the balance sheet as of June 30,
2006. The real estate is included in non-current  assets (other assets) as it is
not  probable  that it will be sold  within  one year.  No  impairment  loss was
incurred on the real estate assets based on the Company's analysis.

      Restructuring  charges  related to the closing of the Norristown  facility
totaling $2.4 million in 2006 ($1.9 million, and $0.5 million in the second, and
third  quarters,  respectively)  were recorded in the  statement of  operations.
These  charges  included  termination  benefits of $2.0  million,  $0.1  million
resulting from a pension curtailment, and $0.3 million of other charges.

      The  activity  in the  restructuring  reserve  was as follows  for the six
months ended June 30, 2006:

                                     Reserve                                         Reserve
                                     Balance                                         Balance
                                    December 31,                                     June 30,
                                       2005          Expense          Paid            2006
                                   -------------  -------------   -------------   -------------
(in thousands)

Termination benefits  (a)             $  --          $ 1,729         $   (16)        $ 1,713

Other facility closure costs             --               74             (74)           --

Pension curtailment charge               --              128            (128)           --
                                      -------        -------         -------         -------

                                      $  --          $ 1,931         $  (218)        $ 1,713
                                      =======        =======         =======         =======

      The Norristown  facility  operated  through the third quarter of 2006. The
closing of Norristown and the sale of certain of its assets was completed by the
end of 2006, and most of the remaining assets are expected to be sold in 2007.

      The Company recently  completed an  environmental  study at the Norristown
facility  which  indicated that  environmental  remediation  activities  with an
estimated cost of $0.8 million are required, which the Company accrued as of the
first quarter of 2006.

HANDY & HARMAN ELECTRONIC MATERIALS ("HHEM")

      In  accordance  with  SFAS No.  144,  "Accounting  for the  Impairment  or
Disposal  of  Long  Lived  Assets",  the  Company  has  evaluated  fixed  assets
associated  with its HHEM facility in light of ongoing  operating  losses.  This
evaluation resulted in the recording of accelerated depreciation of $0.2 million
in 2004,  $0.8  million  in 2005  and $0.6  million  in 2006.  This  accelerated
depreciation is a charge to cost of goods sold in the applicable  period. In the
fourth  quarter of 2006, the Company again  reviewed the  recoverability  of the
long-lived  assets of the HHEM business for  impairment  when it was  determined
that the assets should be  classified  as held for sale in accordance  with SFAS
No.144,  and as a result  of such  review in the  fourth  quarter  of 2006,  the
Company  recorded an asset  impairment  charge of $3.4  million  relating to the
long-lived  assets of HHEM. The amount of the impairment loss was based upon the
actual  selling price of the  long-lived  assets in March 2007. In the Company's
balance  sheet as of December 31, 2006,  the  long-lived  assets of $3.1 million
have been  classified  as  current  assets  held for  sale.  HHEM is part of the
Company's Precious Metals segment. See Note 2 for discussion about a sale of the
HHEM assets in March 2007.

WIRE AND CABLE BUSINESS

      In 2004 the Company  evaluated the current operating plans and current and
forecasted operating results of its wire and cable business.  In accordance with
SFAS No. 144, the Company determined that there were indicators of impairment as
of June 30, 2004 based on continued operating losses, deteriorating margins, and
rising raw material costs. An estimate of future cash flows indicated that as of
June 30, 2004 cash flows would be  insufficient to support the carrying value of


                                       15


the long-lived  assets of the business.  Accordingly,  these assets were written
down to their  estimated  fair value by  recording a non-cash  asset  impairment
charge of $3.9  million in the second  quarter of 2004.  In November  2004,  the
Company announced that it had signed a non-binding  letter of intent to sell its
wire business and that it was  negotiating the sale of its steel cable business.
The decision to sell was based on the  continued  cash flow drain on the Company
caused  by  these  businesses  from  further   increases  in  operating  losses,
deteriorating margins and rising raw material costs. Based on the proposed terms
of these transactions the Company recorded an additional asset impairment charge
of $4.3  million.  At that time the  Company  stated  that if it were  unable to
complete  these  sales it would  consider  the closure of these  operations.  On
January 13, 2005, the Company  determined that a sale of these  operations could
not be completed on terms satisfactory to the Company.  Accordingly, the Company
decided to permanently close the wire and cable businesses.

      In the fourth quarter of 2004, H&H communicated to its 146 union employees
the plan to either sell or close the wire and cable business.  Accordingly,  H&H
recorded a  restructuring  charge of $1.2 million for  termination  benefits and
related costs. These termination benefits were paid in 2005. Additionally,  $0.4
million was recorded as a restructuring charge for clean up costs related to the
Cockeysville,  Maryland  facility.  The Company  operated these  facilities on a
limited  basis  in the  first  quarter  of 2005 in  order  to  fulfill  customer
commitments.  Operating  losses and closure  costs  incurred in 2005 amounted to
$4.2 million  including a $0.7 million gain on the sale of certain  fixed assets
and $0.9 million in termination benefits.  Accordingly, the total cost including
termination benefits, operating losses (excluding fixed asset gains) and closure
costs was approximately  $6.5 million.  These costs were funded from realization
of  working  capital  and  proceeds  from  the  sale of  fixed  assets  of these
businesses.  In the second  quarter of 2005 we concluded  all  operations of the
wire  and  cable  business.   Accordingly,  these  businesses  are  reported  as
discontinued  operations.  In 2006 the Company sold land, buildings, and certain
machinery & equipment  relating to this business for $7.3 million and recognized
a pretax gain on these sales of $4.5 million.

      Losses from discontinued operations were as follows:

(in thousands)
                                             Three Months Ended June 30,    Six Months Ended June 30,
                                                 2006            2005          2006           2005
                                             ------------    ------------  ------------   ------------

Net sales                                      $   --         $    742       $   --         $ 10,672
Gain on sale of assets                             --             --             --              681
Operating loss                                     (167)        (1,522)          (167)        (3,416)
Interest/other expense                             --               31           --               68
Income taxes                                       --             --             --             --
Loss from discontinued operations, net             (167)        (1,553)          (167)        (3,484)

NOTE 9 - PENSIONS, OTHER POSTRETIREMENT AND POST-EMPLOYMENT BENEFITS

      The  following  table  presents the  components  of net  periodic  pension
expense  (credit)  for the WHX Pension  Plan for the three and six months  ended
June 30, 2006 and 2005:


                                       16


(in thousands)                                Three Months Ended            Six Months Ended
                                                   June 30,                      June 30,
                                              2006         2005 (a)        2006          2005 (a)
                                           ---------      ---------      ---------      ---------
Service cost                               $     57       $    326       $    141       $    622
Interest cost                                 5,762          4,131         11,366         11,503
Expected return on plan assets               (7,109)        (5,417)       (14,092)       (13,886)
Amortization of prior service cost               17             51             38             77
Recognized actuarial (gain)/loss                 75            634            303            634
Special termination benefit charge              128           --              128           --
                                           --------       --------       --------       --------
                                           $ (1,070)      $   (275)      $ (2,116)      $ (1,050)
                                           ========       ========       ========       ========

(a) A  curtailment  loss related to the shutdown of the wire  operations of $0.2
million is not included above. This curtailment loss is included in the net loss
from discontinued  operations in the second quarter of 2005. As required by SFAS
No. 88, the  Company  re-measured  its pension  liability  as of the date of the
curtailment  and as a result,  reduced its  year-to-date  pension credit by $0.5
million as of June 30, 2005.

      The Company maintains several other retirement and postretirement  benefit
plans covering  substantially  all of its employees.  The approximate  aggregate
expense for these plans was $0.2  million and $0.5  million for the three months
ended June 30, 2006 and 2005, respectively, and aggregate income of $0.2 million
and aggregate expense of $1.2 million for the six months ended June 30, 2006 and
2005, respectively. The reasons for the aggregate income for these benefit plans
in 2006 was that effective January 1, 2006, the H&H  non-qualified  pension plan
adopted an amendment  under the plan to freeze  benefits  for all  participants.
This resulted in a curtailment credit of $0.5 million, which was recorded in the
first quarter of 2006.

NOTE 10 - DEBT

Long-term debt consists of the following:

                                                        June 30,       December 31,
                                                          2006            2005
                                                        --------       ----------
(in thousands)

H&H Term Loan - related party                             89,627        $ 70,627
H&H Credit Facility - Term Loan A                         18,196          22,664
Sovereign - OMG                                            6,940            --
Other H&H debt                                             5,536           5,352
                                                        --------        --------
                                                         120,299          98,643
Less portion due within one year                           3,718          93,754
                                                        --------        --------
Total long-term debt                                    $116,581        $  4,889
                                                        ========        ========

      As of December 31, 2005, due to default on certain financial  covenants in
its  various  loan  agreements,  the  Company  classified  much  of its  debt as
short-term due to the lenders' ability to demand immediate  payment.  As of June
30, 2006,  such debt has been  classified  as long-term  since the Company is no
longer in default on the debt, and the debts' maturity date is June 30, 2008.

      The increase in debt between December 31, 2005 and June 30, 2006 consisted
principally  of the  following:  On  December  29,  2005,  H&H  entered  into an
amendment to its Term B Loan with Steel.  This  amendment  provided  for,  among
other things, an increase of the Term B Loan in January 2006 by $10 million.  On
January 24, 2006, H&H's wholly-owned  subsidiary,  OMG, Inc. entered into a loan
agreement with Sovereign Bank for $8.0 million,  collateralized by a mortgage on
OMG, Inc.'s real property.  On March 31, 2006, H&H and Steel  Partners,  II L.P.


                                       17


agreed to an increase  in the Term B Loan in the amount of $9.0  million and the
prepayment  in the same amount of a portion of H&H's  subordinated  intercompany
promissory  note issued to WHX.  After the payment of $9.0  million by H&H,  WHX
converted the remaining intercompany note balance to equity.

NOTE 11 - REPORTABLE SEGMENTS

      The Company has three  reportable  segments:  (1)  Precious  Metals.  This
segment manufactures and sells precious metal brazing products and electroplated
material, containing silver, gold, and palladium in combination with base metals
for use in a wide variety of industrial  applications;  (2) Tubing. This segment
manufactures  and sells metal tubing  products and  fabrications  primarily from
stainless steel, carbon steel and specialty alloys, for use in a wide variety of
industrial applications; and (3) Engineered Materials. This segment manufactures
specialty roofing and construction fasteners,  products for gas, electricity and
water  distribution  using steel and plastic which are sold to the construction,
and  natural  gas  and  water  distribution  industries,  and  electrogalvanized
products used in the construction and appliance industries.

      Management  has  determined  that  certain  operating  segments  should be
aggregated  and presented  within a single  reporting  segment on the basis that
such operating  segments have similar economic  characteristics  and share other
qualitative  characteristics.  Management  reviews  gross  profit and  operating
income to evaluate  segment  performance.  Operating  income for the  reportable
segments  excludes  unallocated  general  corporate  expenses.  Other income and
expense,  interest 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 reportable segments for the
three and  six-month  periods  ending June 30, 2006 and 2005:


                                       18


(in thousands)                                                            Three Months Ended                 Six Months Ended
                                                                              June 30,                            June 30,
                                                                      2006               2005              2006             2005
                                                                 ---------------    ---------------   ---------------  ---------------

Net Sales

   Precious Metal                                                   $  39,396           $  29,700        $  76,108        $  59,586
   Tubing                                                              32,308              28,538           62,709           56,987
   Engineered Materials                                                53,519              47,318           99,167           84,912
                                                                    ---------           ---------        ---------        ---------
           Net sales                                                $ 125,223           $ 105,556        $ 237,984        $ 201,485
                                                                    =========           =========        =========        =========

Segment operating income (loss)
   Precious Metal                                                   $   2,470           $     862        $   4,884        $   1,425
   Tubing                                                              (4,111)                782           (3,678)           1,683
   Engineered Materials                                                 5,093               4,786            8,504            7,243
                                                                    ---------           ---------        ---------        ---------
                                                                        3,452               6,430            9,710           10,351
                                                                    ---------           ---------        ---------        ---------

Unallocated corporate expenses                                            871               1,610            1,748            3,262
Pension expense (income)                                               (1,198)(a)            (275)          (2,244)          (1,050)
Environmental remediation expense                                        --                  --              2,909             --
Gain (loss) on disposal of assets                                         (43)                  5              (87)            --
                                                                    ---------           ---------        ---------        ---------

    Income from operations                                              3,736               5,100            7,210            8,139

Interest expense                                                        5,365               3,807            9,948            9,266
Chapter 11 and related reorganization expenses                           --                 3,123             --              4,624
Realized and unrealized (gain) loss on derivatives                       (936)                130            4,530              453
Other (income) loss                                                       183                 (78)             134             (130)
                                                                    ---------           ---------        ---------        ---------

Loss from continuing operations before tax                          $    (876)          $  (1,882)       $  (7,402)       $  (6,074)
                                                                    =========           =========        =========        =========

(a)   Unallocated  pension income does not include a curtailment  charge of $128
      relating to the closure of the Norristown location of HHT. The curtailment
      expense has been allocated to the Tubing segment, which includes HHT.

LEGAL MATTERS:

SUMCO INC. V. UNDERWRITERS AT LLOYD'S,  LONDON,  LEXINGTON  INSURANCE COMPANY,
HARTFORD FIRE INSURANCE COMPANY, AND WURTTEMBERGISCHE VERSICHERUNG AG

      On July 7, 2004, Sumco Inc. ("Sumco"),  a wholly-owned  subsidiary of H&H,
filed suit in the  Marion  County  Superior  Court of  Indiana  against  certain
underwriters  affiliated  with Lloyd's,  London,  Lexington  Insurance  Company,
Hartford Fire  Insurance  Company,  and  Wurttembergische  Versicherung  AG (the
defendants).  Sumco seeks to recover  monies from these  insurance  carriers for
losses  incurred  as a result of a January  20,  2002 fire at its metal  plating
facility  in  Indianapolis,  Indiana.  At the time of the fire,  Sumco's  parent
corporation,  WHX, had in place  layered fire  insurance  policies with combined
limits of $25 million and a deductible  of $100,000.  The  defendants  represent
carriers  who  provided  $15  million  in  insurance  coverage  in excess of two
underlying  policies of $5 million  each.  Defendants  have  previously  paid $5
million in claims.  Sumco  contends  that its losses are in excess of the policy
limits,  defendants  have acted in bad  faith,  and that it is  entitled  to the


                                       19


payment of the remaining  approximate $10 million in insurance coverage provided
by the  defendants.  In December 2006, the Court ruled on the Motion for Summary
Judgment.  It denied the insurers'  motion for summary judgment on the bad faith
claims and limited  the  compensatory  damages  that Sumco  could  recover.  The
defendants  have denied the  allegations  of the complaint and asserted  certain
defenses.  The parties settled their claims in May 2007 for an aggregate payment
to WHX of $5,689,276 from the defendants, and an assignment of their interest to
WHX in up to another $1.7 million in proceeds  resulting  from the settlement of
subrogation  claims  against  various third  parties (the recovery of which,  in
whole  or  part,  is not  assured).  Steel  Partners  has a first  lien on these
proceeds and the Pension Benefit Guaranty Corporation has a second lien.

HANDY & HARMAN  REFINING  GROUP,  INC.,  DEBTOR  PLAINTIFFS V. HANDY & HARMAN,
DEFENDANT

      H&H was a defendant in a lawsuit (the "Indemnity Action") filed by Handy &
Harman Refining Group, Inc. ("HHRG") (an unrelated party to H&H) seeking a money
judgment in the amount of $8.5 million, plus interest,  which as of December 31,
2005 was alleged to be  approximately  $4.0  million,  for an alleged  breach of
contract in connection with H&H's sale of its Precious Metals Refining  Division
to HHRG in 1996.  HHRG  subsequently  filed for  Chapter  11 and  commenced  the
Indemnity  Action in the  Bankruptcy  Court on or about August 14,  2002.  On or
about May 26, 2004,  the Indemnity  Action was  transferred to the United States
District  Court for the District of  Connecticut.  H&H filed a proof of claim in
the HHRG  bankruptcy  which  had an  outstanding  amount of  approximately  $1.9
million and funds had been set aside in that amount by HHRG. The parties settled
this matter in June 2006 for the  surrender of the full amount of H&H's proof of
claim of $1.9 million  plus a payment of $438,000 to HHRG.  The  settlement  was
approved by the Bankruptcy Court.

HH EAST PARCEL, LLC. V. HANDY & HARMAN

      This action  arises out of a purchase and sale  agreement  entered into in
2003  whereby  H&H agreed to sell the  eastern  parcel of a  commercial  site in
Fairfield,  Connecticut to HH East Parcel, LLC ("HH East"). On or about April 5,
2005,  HH East  filed a Demand for  Arbitration  with the  American  Arbitration
Association  seeking  legal and  equitable  relief  including  completion of the
remediation of environmental conditions at the site in accordance with the terms
of  the  agreement.  An  arbitration  hearing  was  held  in  November  2005  in
Connecticut, pursuant to which HH East was awarded an amount equal to $5,000 per
day from January 1, 2005  through the date on which  remediation  is  completed.
This award amounts to approximately  $4.0 million through the completion date of
April 6, 2007.  H&H  applied to the  Superior  Court of  Connecticut,  Fairfield
County,  to have the arbitration award vacated and a decision was issued on June
26, 2006,  denying H&H's  application.  H&H is appealing this decision.  H&H has
been working  cooperatively  with the  Connecticut  Department of  Environmental
Protection  ("CTDEP")  with  respect to its  obligations  under a consent  order
entered into in 1989 that applies to both the eastern and western parcels of the
property. H&H has been conducting an investigation of the western parcel, and is
continuing the process of evaluating  various options for its  remediation.  The
sale of the  eastern  parcel that is the  subject of this  litigation  triggered
statutory  obligations  under  Connecticut  law  to  investigate  and  remediate
pollution  at  or  emanating  from  the  eastern   parcel.   H&H  completed  the
investigation  and  has  been  actively  conducting   remediation  of  all  soil
conditions  on the  eastern  parcel  for more  than  three  years.  Although  no
groundwater  remediation  is  required,  there  will be  monitoring  of same for
several years. Remediation of all soil conditions on site was completed on April
6, 2007. The total  remediation  is expected to exceed $28.0  million,  of which
approximately  $23.9 million had been expended  through  December 31, 2006.  H&H
received  reimbursement  of $2.0 million of these costs from its carrier under a
cost-cap  insurance  policy  and  is  pursuing  its  potential   entitlement  to
additional coverage.

PAUL E. DIXON & DENNIS C. KELLY V. HANDY & HARMAN

      Two former  officers of H&H filed a Statement  of Claim with the  American
Arbitration  Association  ("Arbitration") on or about January 3, 2006,  alleging
four claims  against H&H. The Claimants  were  employees of H&H until  September
2005 when their  employment was terminated by H&H. Their claims include  seeking
payments allegedly due under employment contracts and allegedly arising from the
terminations,  and seeking  recovery of benefits  under what they allege was the
Handy & Harman Supplemental Executive Retirement Plan.

      The Statement of Claim recites that the  employment  agreements of each of
the  Claimants  provides that H&H may  terminate  their  employment at any time,
without prior notice,  for any of the following  reasons:  "(i) [the  officer's]
engaging  in conduct  which is  materially  injurious  to [H&H] or [WHX],  their
subsidiaries  or  affiliates,  or any of their  respective  customer or supplier
relationships, monetarily or otherwise; (ii) [the officer's] engaging in any act
of fraud,  misappropriation  or embezzlement or any act which would constitute a
felony (other than minor traffic violations);  or (iii) [the officer's] material
breach of the  agreement." The Statement of Claim further  alleges,  and H&H has
not disputed,  that each Claimant's  employment was terminated in September 2005


                                       20


pursuant to a letter,  which  stated in part,  that each  Claimant  had violated
provisions of such  officer's  employment  agreement,  contained in the previous
sentence,  "by, INTER ALIA, attempting to amend and put in place various benefit
plans to  personally  benefit  yourself,  without  notice to, or approval of the
Board of  Directors;  for  further  failing to  disclose  the  existence  of the
relevant  plan  documents  and other  information  to the Board;  for failing to
cooperate in the Company's investigation of these important issues; for material
losses to the Company in connection with these actions....".

      In the  Arbitration,  Claimants  sought an award in  excess of $4  million
each,  plus  interest,   costs  and  attorneys'  fees.   Claimants  also  sought
indemnification for certain matters and an injunction against H&H with regard to
life insurance  policies.  H&H brought a special proceeding on February 15, 2006
in the  Supreme  Court of the State of New York,  County of  Westchester,  for a
judgment staying the arbitration of three of the four claims. On March 10, 2006,
all of the parties filed a stipulation with the court,  discontinuing  the court
proceeding and agreeing therein, among other things, that all claims asserted by
the  Claimants in the  Arbitration  (which was also  discontinued  at that time)
would be asserted in Supreme Court, Westchester County.

      In April 2006,  Claimants  served a request for  benefits,  severance  and
other  amounts,  similar  to those  described  above,  on H&H and  various  plan
administrators and fiduciaries  thereof.  The request was reviewed in accordance
with the  procedures  of the plans at issue and by letter  dated  September  27,
2006;  Claimants were notified that their request was largely denied. They filed
an appeal on December  11, 2006 with the Plan  Administrator,  which  appeal was
denied on  February 9, 2007.  While no action is pending in any court,  H&H does
not  believe  that it is liable to  Claimants  under the  claims  that have been
asserted to date, and it intends to defend itself vigorously  against any claims
that may be asserted by  Claimants.  There can be no assurance  that H&H will be
successful in defending  against any such claims,  or that H&H will not have any
liability  on  account  of  claims  that  may be  asserted  by  Claimants.  Such
liability,   if  any,  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 and cash flow
of the Company.

ARISTA DEVELOPMENT LLC V. HANDY & HARMAN ELECTRONIC MATERIALS CORPORATION

            In 2004,  a  subsidiary  of H&H entered  into an agreement to sell a
commercial/industrial  property  in  North  Attleboro,  Massachusetts.  Disputes
between  the  parties  led to suit being  brought in Bristol  Superior  Court in
Massachusetts.  The plaintiff  alleges that H&H is liable for breach of contract
and  certain  consequential  damages  as a result  of H&H's  termination  of the
agreement in 2005, although H&H subsequently  revoked its notice of termination.
H&H has denied  liability and has been vigorously  defending the case. The court
entered a preliminary  injunction  enjoining H&H from  conveying the property to
anyone other than the  plaintiff  during the pendency of the case.  Discovery on
liability and damages has been stayed while the parties are actively  engaged in
settlement  discussions,  on which they have  reached  agreement  in  principle,
subject to certain conditions.  Concurrently with these settlement efforts,  H&H
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.  H&H is in discussions  with the EPA, the
MADEP and the  plaintiff  in  connection  with the  remedial  activities.  Since
discovery  is not  completed,  it  cannot be known at this  time  whether  it is
foreseeable  or probable  that  plaintiff  would  prevail in the  litigation  or
whether H&H would have any liability to the plaintiff.

ENVIRONMENTAL ACTIONS

      In  connection  with the sale of its  Fairfield,  Connecticut  facility in
2003, the Company was responsible for demolition and  environmental  remediation
of the  site,  the  estimated  cost of which  was  included  in the loss on sale
recorded  in  2003.  H&H  determined   that  an  increase  in  the  reserve  for
environmental  remediation was needed in the amount of $28.3 million,  which was
recorded in the fourth quarter of 2004. This change in reserve was caused by the
discovery  of  underground  debris  and  soil  contaminants  that  had not  been
anticipated.  These additional  costs are included in environmental  remediation
expense.  An  additional  $3.8  million was  recorded  in  selling,  general and
administrative  expenses as a penalty  related to  Fairfield  East.  The Company
retains title to a parcel of land  adjacent to the property  sold in 2003.  This
parcel is classified as other non-current assets, in the amount of $2.0 million,
on the consolidated balance sheet at June 30, 2006 and December 31, 2005.

      H&H entered into an administrative  consent order (the "ACO") in 1986 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
remediation  to be performed with regard to soil and  groundwater  contamination
allegedly  from TCE.  H&H settled a case  brought by the local  municipality  in
regard to this  site in 1998 and also  settled  with  certain  of its  insurance
carriers. H&H is actively remediating the property and continuing to investigate
the most  effective  methods for achieving  compliance  with the ACO. A remedial


                                       21


investigation  report  was  filed  with  the  NJDEP  in May of  2006.  Once  the
investigation has been completed, it will be followed by a feasibility study and
a remedial  action work plan that will be  submitted to NJDEP.  H&H  anticipates
entering into discussions in the near future with NJDEP to address that agency's
natural  resource damage claims,  the ultimate scope and cost of which cannot be
estimated at this time. The ongoing cost of  remediation is presently  estimated
at approximately  $450,000 per year, plus anticipated  additional costs in early
2007 of  approximately  $700,000.  Pursuant to a settlement  agreement  with the
former operator of this facility,  the responsibility for site investigation and
remediation  costs have been  allocated,  75% to the former  operator and 25% to
H&H. To date, total  investigation and remediation costs of $237,000 and $79,000
have been settled by the former  operator and H&H,  respectively,  in accordance
with this agreement.  Additionally,  H&H is currently being  reimbursed  through
insurance  coverage  for a portion  of those  costs for  which  the  company  is
responsible.  There is additional excess insurance coverage which H&H intends to
pursue as necessary.

      H&H has been identified as a potentially  responsible  party ("PRP") under
the  Comprehensive  Environmental  Response,   Compensation  and  Liability  Act
("CERCLA") or similar state statutes at several sites and is a party to ACO's in
connection  with  certain  properties.  H&H may be subject to joint and  several
liabilities  imposed by CERCLA on potentially  responsible  parties.  Due to the
technical and regulatory  complexity of remedial activities and the difficulties
attendant in  identifying  potentially  responsible  parties and  allocating  or
determining  liability  among them,  H&H is unable to  reasonably  estimate  the
ultimate cost of compliance with such laws.

      In a case entitled Agere Systems,  Inc., et al. v. Advanced  Environmental
Technology Corp., et al. (U.S.  District Court,  EDPA),  five companies,  all of
which are PRPs for the Boarhead Farm site in Bucks County, Pennsylvania, brought
CERCLA contribution and similar claims under  Pennsylvania's  environmental laws
against a number of companies in 2002,  including a subsidiary of H&H, which the
plaintiffs claim  contributed to the  contamination of the Boarhead Farm site. A
number of the  plaintiffs  entered  into  settlements  with several of the named
defendants and consent decrees with the Environmental  Protection Agency ("EPA")
regarding the remediation of groundwater and soil  contamination at the Boarhead
Farm site.  There are currently  nine  non-settling  defendants,  including H&H,
against which the plaintiffs are pursuing their claims.  Fact discovery has been
concluded and the parties are engaged in expert  discovery.  The plaintiffs have
already made  substantial  payments to the EPA in past  response  costs and have
themselves   incurred  costs  for  groundwater  and  soil   remediation,   which
remediation is continuing.  Plaintiffs are seeking reimbursement of a portion of
amounts  incurred  and an  allocation  of future  amounts from H&H and the other
non-settling defendants. H&H has been advised by counsel that its responsibility
for this site,  if any,  should be minimal and has  demanded  coverage  from its
insurance  carrier for any claims for which it could be held  liable.  It is not
possible to reasonably  estimate the cost of remediation or H&H's share, if any,
of the liability at this time.

      H&H received a notice letter from the EPA in August 2006  formally  naming
H&H as a PRP at the Shpack landfill superfund site in Attleboro,  Massachusetts.
H&H then  voluntarily  joined a group of ten (10)  other PRPs  (which  group has
since increased to thirteen (13)) to work cooperatively regarding remediation of
this site.  Investigative  work is ongoing to determine  whether there are other
parties  that sent  hazardous  substances  to the Shpack  site but that have not
received  notice  letters nor been named as PRPs to date.  No  allocation  as to
percentages of responsibility for any of the PRPs has been assigned or accepted;
proposed  allocations are expected to be determined during the second quarter of
2007 (although that could be extended),, at which point H&H could still withdraw
from the group.  The PRP group submitted its good faith offer to the EPA in late
October 2006. It is not anticipated that the EPA will accept or reject the PRP's
offer  until some time in 2007.  If  accepted,  it is not  anticipated  that PRP
remedial  activities at the site will begin before 2008.  The  remediation  of a
significant amount of the contamination at the site is the responsibility of the
U.S.  Army  Corps of  Engineers.  That  portion of the work has begun but is not
expected to be completed  before 2008, at which time the remaining  work will be
more clearly defined.  The Company has recorded a reserve of $1.5 million in the
first quarter of 2006 in connection with this matter.

      As discussed above, H&H has 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. H&H has substantial  remediation  expenses on an
ongoing basis,  although such costs are continually  being readjusted based upon
the  emergence of new  techniques  and  alternative  methods.  In addition,  the
Company has insurance  coverage  available for several of these  matters.  Based
upon   information   currently   available,   including   H&H's  prior   capital
expenditures, anticipated capital expenditures, and information available to H&H
on pending  judicial  and  administrative  proceedings,  H&H does not expect its
environmental compliance costs, including the incurrence of additional fines and
penalties,  if  any,  relating  to the  operation  of its  facilities  to have a
material  adverse  effect on the  financial  position,  but there can be no such
assurances. Such costs could be material to H&H's results of operations and cash
flows. We anticipate that H&H will pay such amounts out of its working  capital,
although there is no assurance that H&H will have  sufficient  funds to pay such


                                       22


amounts. In the event that H&H is unable to fund these liabilities, claims could
be made  against WHX for  payment of such  liabilities.  As further  information
comes  into  the  Company's  possession,  it  will  continue  to  reassess  such
evaluations.


OTHER LITIGATION

      H&H or its  subsidiaries  are a defendant in numerous  cases  pending in a
variety of jurisdictions relating to welding emissions.  Generally,  the factual
underpinning of the plaintiffs'  claims is that the use of welding  products for
their ordinary and intended  purposes in the welding process causes emissions of
fumes  that  contain  manganese,  which is toxic to the  human  central  nervous
system.  The  plaintiffs  assert that they were  over-exposed  to welding  fumes
emitted  by  welding  products  manufactured  and  supplied  by  H&H  and  other
co-defendants.  H&H denies  liability and is defending these actions.  It is not
possible  to  reasonably  estimate  H&H's  exposure  or  share,  if any,  of the
liability at this time.
      In addition to the  foregoing  cases,  there are a number of other product
liability,  exposure,  accident,  casualty and other  claims  against H&H or its
subsidiaries in connection  with a variety of products sold by its  subsidiaries
over  several  years,  as well as  litigation  related  to  employment  matters,
contract matters,  sales and purchase transactions and general liability claims,
many of which arise in the ordinary  course of  business.  It is not possible to
reasonably  estimate H&H's  exposure or share,  if any, of the liability at this
time.
        There is insurance coverage  available for many of these actions,  which
are being litigated in a variety of jurisdictions. To date, H&H has not incurred
and does not believe it will incur any  significant  liability  with  respect to
these  claims,  which it  contests  vigorously  in most  cases.  However,  it is
possible that the ultimate resolution of such litigation and claims could have a
material adverse effect on quarterly or annual results of operations,  financial
position and cash flows when they are resolved in future periods.

PENSION PLAN CONTINGENCY ARISING FROM THE WPC GROUP BANKRUPTCY

      Wheeling-Pittsburgh  Corporation  ("WPC")  and  six  of  its  subsidiaries
(collectively  referred to as the "WPC  Group"),  including  Wheeling-Pittsburgh
Steel Corporation ("WPSC"), a vertically integrated  manufacturer of value-added
and flat  rolled  steel  products,  was a wholly  owned  subsidiary  of WHX.  On
November 16, 2000, the WPC Group filed a petition seeking  reorganization  under
Chapter 11 of Title 11 of the United States  Bankruptcy  Code. A Chapter 11 Plan
of Reorganization for the WPC Group (the "WPC POR") was consummated on August 1,
2003,  pursuant  to which,  among  other  things,  the WPC Group  ceased to be a
subsidiary of WHX effective  August 1, 2003, and from that date forward has been
an independent company.

      As part of the WPC POR, the Company  agreed to make certain  contributions
(the  "WHX   Contributions")   to  the  reorganized   company.   Under  the  WHX
Contributions,  the Company  forgave the repayment of its claims against the WPC
Group of  approximately  $39.0  million and,  additionally,  contributed  to the
reorganized company $20.0 million of cash, for which the Company received a note
in the amount of $10.0 million. The note was fully reserved upon receipt.

      On  March  6,  2003,  the  PBGC  published  its  Notice  of  Determination
("Notice") and on March 7, 2003 filed a Summons and Complaint  ("Complaint")  in
United States  District Court for the Southern  District of New York seeking the
involuntary  termination  of the WHX Pension  Plan (the "WHX  Plan"),  a defined
benefit pension plan sponsored by the Company that provides  pension benefits to
active and retired  employees of WHX and H&H and certain  benefits to active and
retired  employees  of  members  of the WPC  Group.  WHX filed an answer to this
complaint on March 27, 2003, contesting the PBGC's action. On July 24, 2003, the
Company  entered into an agreement  among the PBGC,  WPC,  WPSC,  and the United
Steelworkers of America,  AFL-CIO-CLC ("USWA") in settlement of matters relating
to the PBGC v. WHX  Corporation,  Civil  Action  No.  03-CV-1553,  in the United
States  District  Court  for the  Southern  District  of New York  ("Termination
Litigation"), in which the PBGC was seeking to terminate the WHX Plan. Under the
settlement,  among  other  things,  WHX agreed  (a) that the WHX Plan,  as it is
currently  constituted,  is a single  employer  pension plan,  (b) to contribute
funds to the WHX Plan equal to moneys spent (if any) by WHX or its affiliates to
purchase  WHX  10.5%  Senior  Notes  ("Senior  Notes")  in  future  open  market
transactions,  and (c) to grant to the PBGC a pari passu security interest of up
to $50.0  million in the event WHX  obtains  any future  financing  on a secured
basis or provides any security or collateral for the Senior Notes.

      Also under the  settlement,  all parties  agreed that as of the  effective
date of the WPC POR,  (a) no shutdowns  had occurred at any WPC Group  facility,
(b) no member of the WPC Group is a  participating  employer under the WHX Plan,
(c)  continuous  service for WPC Group  employees  was broken,  (d) no WPC Group
employees will become  entitled to "Rule of 65" or "70/80"  Retirement  Benefits
(collectively,  "Shutdown  Benefits")  by reason of events  occurring  after the
effective  date of the WPC POR, and (e) the WHX Plan would provide for a limited
early retirement option to allow up to 650 WPSC  USWA-represented  employees the
right to receive retirement benefits based on the employee's years of service as
of  July  31,  2003  with a  monthly  benefit  equal  to $40  multiplied  by the
employee's years of service.


                                       23


      Finally,  under  the  settlement,  the PBGC  agreed  (a)  that,  after the
effective  date of the WPC POR, if it  terminates  the WHX Plan at least one day
prior  to a WPC  Group  facility  shutdown,  WHX  shall  be  released  from  any
additional  liability to PBGC resulting  from the shutdown,  (b) to withdraw its
claims in the WPC  Bankruptcy  Proceedings,  and (c) to dismiss the  Termination
Litigation.

      The agreement  with the PBGC also contains the provision that WHX will not
contest a future action by the PBGC to terminate the WHX Plan in connection with
a future WPC Group facility shutdown.  In the event that such a plan termination
occurs,  the PBGC has agreed to  release  WHX from any  claims  relating  to the
shutdown. However, there may be PBGC claims related to unfunded liabilities that
may exist as a result of a termination of the WHX Plan.

PART I

ITEM 2. MANAGEMENT'S  DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

OVERVIEW

      WHX  is a  holding  company  that  invests  in  and  manages  a  group  of
businesses.  WHX's primary  business  currently is Handy & Harman, a diversified
manufacturing  company whose strategic business units encompass three reportable
segments: precious metals, tubing, and engineered materials.

VOLUNTARY PETITION UNDER CHAPTER 11 OF U.S. BANKRUPTCY CODE

      On March 7, 2005,  WHX filed a  voluntary  petition  to  reorganize  under
Chapter 11 of the United States  Bankruptcy  Code.  WHX continued to operate its
businesses and own and manage its properties as a debtor-in-possession under the
jurisdiction  of the  bankruptcy  court until it emerged from  protection  under
Chapter 11 of the Bankruptcy Code on July 29, 2005. WHX's Bankruptcy  Filing was
primarily intended to reduce WHX's debt, simplify its capital structure,  reduce
its  overall  cost of  capital  and  provide  it with  better  access to capital
markets.

RESULTS OF OPERATIONS

COMPARISON OF THE SECOND QUARTER OF 2006 WITH THE SECOND QUARTER OF 2005

      Net sales for the second quarter of 2006  increased by $19.7  million,  or
18.6%, to $125.2 million, as compared to $105.6 million in the second quarter of
2005.  Sales  increased  by $9.7  million at the Precious  Metal  Segment,  $3.8
million at the Tubing  Segment  and $6.2  million  at the  Engineered  Materials
Segment. The higher sales occurred principally because of an increase in volume,
which rose across all segments,  but  particularly  in the Engineered  Materials
segment.  The  remainder  of the  increase in sales was due to price  increases,
which occurred principally in the Precious Metals segment.

      Gross profit  percentage  declined to 18.8% in the second  quarter of 2006
from 19.5% in the second  quarter of 2005.  The major  factors  that  negatively
impacted gross profit in the second quarter of 2006 were  inefficiencies  at the
Company's  new  Mexican  tubing  facility  and  raw  material  price  increases,
especially  precious  metals.  These  factors  were  partially  offset by a $1.0
million  favorable effect on gross profit from the liquidation of precious metal
inventories valued at LIFO cost in the second quarter of 2006.

      Selling,  general  and  administrative  ("SG&A)  expenses  increased  $0.6
million to $16.0 million in the second quarter of 2006 from $15.4 million in the
comparable  2005  period.  This was  caused  principally  by  higher  costs  for
additional sales staff and higher  commissions (in line with sales increases) at
certain of H&H's  subsidiaries.  Those higher costs were partially offset by the
Company's  cost of its qualified  pension plan,  which was $0.8 million lower in
the second quarter of 2006 compared to the second quarter of 2005.  This was the
result of two factors;  (1) pension benefits were frozen for  substantially  all
non-union employees at the end of 2005, and (2) in the second quarter of 2005, a
curtailment  occurred in the pension plan in connection  with the closure of the
Company's wire and cable  business,  and as required by SFAS No. 88, the Company
re-measured  its pension  liability as of the date of the  curtailment  and as a
result,  reduced its year-to date pension  credit by $0.5 million as of June 30,
2005.


                                       24


      On May 9, 2006,  the Company  announced  the closing of the Handy & Harman
Tube Co. ("HHT") Norristown,  Pennsylvania  facility.  The decision to close the
Norristown  facility was  principally  based on the economics of operating HHT's
business  at the  facility.  HHT  manufactured  stainless  steel  tubing that is
supplied in various lengths and forms in both coil and straight  lengths.  HHT's
coil  business  was  relocated  to H&H's Camdel  Metals  Corporation  ("Camdel")
facility located in Camden,  Delaware. In conjunction with the decision to close
the  Norristown  facility,  the  Company  reviewed  the  recoverability  of  the
Norristown  long-lived  assets in accordance with SFAS No. 144,  "Accounting for
Impairment  or Disposal of  Long-Lived  Assets".  A review of future cash flows,
based  on the  expected  closing  date,  indicated  that  cash  flows  would  be
insufficient to support the carrying value of certain machinery and equipment at
Norristown. As a result, the Company recorded an asset impairment charge of $1.8
million  in its  statement  of  operations  for the second  quarter of 2006.  No
impairment  loss was incurred on the real estate  assets based on the  Company's
analysis.

      Restructuring  charges relate to the closing of the Norristown facility. A
charge of $1.9  million was  recorded in the second  quarter  2006  statement of
operations. These charges included termination benefits of $1.8 million and $0.1
million resulting from a pension curtailment.

      Operating  income for the second  quarter of 2006 was $3.7  million,  $1.4
million less than the second  quarter of 2005. The sales  improvement  generated
additional gross margin dollars (although at a lower percentage rate than in the
second quarter of 2005),  and there was also a favorable  effect on gross profit
from the  liquidation  of precious  metal  inventories  valued at LIFO cost. The
additional gross margin dollars were offset by higher SG&A  expenses related
to  restructuring  charges  and  asset  impairment  charges  related  to the HHT
closing.

      Interest  expense for the second quarter of 2006 rose $1.6 million to $5.4
million  from $3.8  million in the second  quarter of 2005.  Approximately  $0.9
million of the increase was due to additional debt that the Company entered into
during the first quarter of 2006.  See  discussion of cash flows from  Financing
Activities that follows  regarding the Company's new borrowings.  The balance of
the increase was principally attributable to higher interest rates in the second
quarter of 2006 compared to the second quarter of 2005.

      In the second quarter of 2005, the Company  recorded $3.1 million of costs
related  to  Chapter  11 filing and  reorganization  expenses,  which  represent
expenses incurred by WHX because of its  reorganization  under Chapter 11 of the
U.S. Bankruptcy Code. Such expenses principally consist of professional fees for
services provided by debtor and creditor professionals directly related to WHX's
reorganization proceedings.

      Realized and  unrealized  gains and losses on  derivatives  consisted of a
gain of $0.9 million in the second  quarter of 2006,  compared to a loss of $0.1
million in the second quarter of 2005. The  derivative  instruments  utilized by
the Company are precious metal forward contracts. The gain in the second quarter
of 2006 resulted principally from a reduction in precious metal prices since the
end of the previous quarter, and the loss in the second quarter of 2005 resulted
principally from an increase in precious metal prices during that quarter.

      In the second  quarters of 2006 and 2005, a tax  provision of $0.7 million
and $0.5 million,  respectively,  was recorded for state and foreign taxes.  The
Company  has  recorded  a  valuation  allowance  related  to  the  tax  benefits
associated  with its operating  losses in each quarter due to the uncertainty of
realizing these benefits in the future.

      The Loss from Discontinued Operations of $0.2 million and $1.6 million for
the second quarter of 2006 and 2005, respectively, relates to the Company's wire
and cable business,  which had been part of the Wire and Tubing segment. In 2004
the Company  evaluated the current  operating  plans and current and  forecasted
operating  results of its wire and cable  business.  In accordance with SFAS No.
144,  "Accounting for Impairment or Disposal of Long-Lived Assets",  the Company
determined  that there  were  indicators  of  impairment  based  upon  continued
operating  losses,  deteriorating  margins,  and rising raw material  costs.  An
estimate of future cash flows indicated that cash flows would be insufficient to
support the carrying value of the long-term assets of the business. Accordingly,
these  assets  were  written  down to their  estimated  fair value by  recording
non-cash asset impairment charges totaling $8.2 million in 2004. The decision to
close these operations  resulted in 2004  restructuring  charges of $1.2 million
for termination  benefits and related costs, and $0.4 million for clean up costs
related to one of its  facilities.  On January 13, 2005, the Company  decided to
permanently  close the wire and cable  businesses.  The Company  operated  these
facilities  on a limited  basis in the first quarter of 2005 in order to fulfill
customer commitments.  In the second quarter of 2005, all operations of the wire
and cable business were concluded. Accordingly, these businesses are reported as
discontinued operations.

      The comments that follow compare  revenues and operating income by segment
for the second quarter of 2006 and 2005:


                                       25


PRECIOUS METAL

      Sales for the Precious  Metal segment  increased  $9.7 million,  or 32.6%,
from $29.7 million in 2005 to $39.4  million in 2006,  driven mainly by precious
metal price  increases.  In  addition,  higher  volume also  occurred due to new
distribution and sales force initiatives.

      Operating income for the Precious Metal segment  increased $1.6 million to
$2.5  million in 2006 from $0.9  million in 2005.  This  increase was related to
increased  sales,  a more favorable mix of  fabrication  (higher  margin) versus
plating (lower margin)  revenues in the second quarter of 2006 compared to 2005,
and a $1.0 million favorable effect on segment gross profit from the liquidation
of precious metal inventories valued at LIFO cost in the second quarter of 2006.
Partially  offsetting  these favorable  factors were  moderately  higher selling
expenses related to higher sales revenues.

TUBING

      In the second quarter of 2006, sales for the Tubing Segment increased $3.8
million,  or  13.2%,  from  $28.5  million  in 2005 to  $32.3  million  in 2006,
principally due to market share increase.  On May 9, 2006, the Company announced
the  closure of the  Norristown,  Pennsylvania  facility of the H&H Tube Co. The
facility  continued to operate during the second quarter and sales  increased by
$1.0 million compared to the same quarter last year,  principally due to special
non-recurring sales and accelerated shipment of product prior to shutdown.

      Operating income decreased by $4.9 million despite the sales increase,  to
a loss of $4.1 million in the second  quarter of 2006 from  operating  income of
$0.8 million in the same quarter of 2005. Included in this loss was $1.9 million
in shutdown  costs and a $1.8 million asset  impairment  charge both relating to
the closing of the Norristown facility. In addition,  cost inefficiencies at the
Company's new Mexican tubing facility also  contributed to the operating loss in
the current quarter.

ENGINEERED MATERIALS

      Sales for the Engineered  Materials  Segment  increased  $6.2 million,  or
13.1%,  from  $47.3  million in 2005 to $53.5  million in 2006 due to  increased
volume in all product lines.  Partially  offsetting these increases were selling
price reductions at the segment's electrogalvanized steel unit.

      Operating  income  increased in the second quarter of 2006 by $0.3 million
from $4.8  million  in 2005 to $5.1  million  in 2006  primarily  because of the
higher sales  volume.  However,  an increase in selling  expenses and  marketing
personnel offset much of this increase.

UNALLOCATED CORPORATE EXPENSES

      Unallocated  corporate  expenses  declined from $1.6 million in the second
quarter  of 2005 to $0.9  million  in the  second  quarter  of 2006.  There were
reductions in the costs for executive salaries, insurance, and Board of Director
fees and  expenses.  The  Company's  pension  credit rose by $0.9 million in the
second quarter of 2006 compared to the same period in 2005.  This was the result
of two factors; (1) pension benefits were frozen for substantially all non-union
employees  at the  end of  2005,  and  (2) in the  second  quarter  of  2005,  a
curtailment  occurred in the pension plan in connection  with the closure of the
Company's wire and cable  business,  and as required by SFAS No. 88, the Company
re-measured  its pension  liability as of the date of the  curtailment  and as a
result,  reduced its year-to date pension  credit by $0.5 million as of June 30,
2005.

COMPARISON OF THE FIRST SIX MONTHS OF 2006 WITH THE FIRST SIX MONTHS OF 2005

      Net sales for the first six months of 2006 increased by $36.5 million,  or
18.1%, to $238.0 million,  as compared to $201.5 million in the first six months
of 2005.  Sales  increased by $16.5 million at the Precious Metal Segment,  $5.7
million at the Tubing  Segment  and $14.3  million at the  Engineered  Materials
Segment. The higher sales occurred principally because of an increase in volume,
which rose across all segments,  but  particularly  in the Engineered  Materials
segment.  The  remainder  of the  increase in sales was due to price  increases,
which occurred principally in the Precious Metals segment.


                                       26


      Gross profit percentage  declined to 18.9% in the first six months of 2006
from 19.3% in the first six months of 2005.  The major  factors that  negatively
impacted gross profit  percentage in the 2006 period were  inefficiencies at the
Company's  new  Mexican  tubing  facility  and  raw  material  price  increases,
especially  precious metals.  Partially  offsetting  these factors,  there was a
shift in overall  sales mix whereby  sales in segments  with higher gross profit
percentages accounted for more of the total in 2006 than in 2005.

      Selling,  general and  administrative  ("SG&A")  expenses  increased  $0.3
million to $31.0  million in the first six months of 2006 from $30.7  million in
the  comparable  2005 period.  This was caused  principally  by higher costs for
additional sales staff and higher  commissions (in line with sales increases) at
certain of H&H's  subsidiaries.  Those higher costs were partially offset by the
Company's  cost of its qualified  pension plan,  which was $1.1 million lower in
the first six months of 2006 compared to the first six months of 2005.  This was
the result of two factors;  (1) pension  benefits were frozen for  substantially
all  non-union  employees at the end of 2005,  and (2) in the second  quarter of
2005, a curtailment  occurred in the pension plan in connection with the closure
of the Company's  wire and cable  business,  and as required by SFAS No. 88, the
Company  re-measured its pension liability as of the date of the curtailment and
as a result,  reduced its year-to date pension credit by $0.5 million as of June
30, 2005.

      Environmental  remediation expense of $2.9 million in the first six months
of 2006 includes $1.5 million related to the Company's estimated exposure at the
Shpack  landfill  site,  and $0.8  million  in  connection  with  the  Company's
Norristown  Pennsylvania  facility.  H&H  received  a  notice  letter  from  the
Environmental  Protection Agency ("EPA") in August 2006 formally naming H&H as a
potentially  responsible party ("PRP") at the Shpack landfill  superfund site in
North Attleboro,  Massachusetts. H&H then voluntarily joined a group of ten (10)
other  PRPs  (which  group  has  since  increased  to  thirteen  (13))  to  work
cooperatively regarding remediation of this site.  Investigative work is ongoing
to determine  whether there are other parties that sent hazardous  substances to
the Shpack site but that have not received notice letters nor been named as PRPs
to date. No allocation as to percentages of  responsibility  for any of the PRPs
has  been  assigned  or  accepted;  proposed  allocations  are  expected  to  be
determined  during the second quarter of 2007 (although that could be extended),
at which point H&H could still withdraw from the group.  The PRP group submitted
its good faith offer to the EPA in late October 2006. It is not anticipated that
the EPA will  accept  or reject  the PRPs'  offer  until  some time in 2007.  If
accepted,  it is not anticipated  that PRP remedial  activities at the site will
begin before 2008. The remediation of a significant  amount of the contamination
at the site is the  responsibility  of the U.S.  Army Corps of  Engineers.  That
portion of the work has begun but is not expected to be  completed  before 2008,
at which time the remaining work will be more clearly defined.  At the Company's
Norristown facility, the Company recently completed a study which indicated that
environmental  remediation activities with an estimated cost of $0.8 million are
required,  which the Company accrued as of the first quarter of 2006. There were
no environmental remediation expenses charged in the first six months of 2005.

      On May 9, 2006,  the Company  announced  the closing of the Handy & Harman
Tube Co. ("HHT") Norristown,  Pennsylvania  facility.  The decision to close the
Norristown  facility was  principally  based on the economics of operating HHT's
business  at the  facility.  HHT  manufactured  stainless  steel  tubing that is
supplied in various lengths and forms in both coil and straight  lengths.  HHT's
coil  business  was  relocated  to H&H's Camdel  Metals  Corporation  ("Camdel")
facility located in Camden,  Delaware. In conjunction with the decision to close
the  Norristown  facility,  the  Company  reviewed  the  recoverability  of  the
Norristown  long-lived  assets in accordance with SFAS No. 144,  "Accounting for
Impairment  or Disposal of  Long-Lived  Assets".  A review of future cash flows,
based  on the  expected  closing  date,  indicated  that  cash  flows  would  be
insufficient to support the carrying value of certain machinery and equipment at
Norristown. As a result, the Company recorded an asset impairment charge of $1.8
million  in its  statement  of  operations  for the second  quarter of 2006.  No
impairment  loss was incurred on the real estate  assets based on the  Company's
analysis.

      Restructuring  charges relate to the closing of the Norristown facility. A
charge of $1.9  million was  recorded in the second  quarter  2006  statement of
operations. These charges included termination benefits of $1.8 million and $0.1
million resulting from a pension curtailment.


                                       27


      Operating  income at the  consolidated  level for the first six  months of
2006 was $7.2 million,  which was $0.9 million  higher than the first six months
of 2005. At the segment  level,  operating  income was $9.7 million  compared to
$10.4 million in the first six months of 2005. The sales  improvement  generated
additional gross margin dollars (although at a lower percentage rate than in the
first six months of 2005),  but the additional  gross margin dollars were offset
by  the  asset  impairment  charge,   restructuring   costs,  and  environmental
remediation expenses.

      Interest  expense  for the first six  months of 2006 rose $0.7  million to
$10.0  million from $9.3  million in the first six months of 2005.  There was an
increase of  approximately  $1.2 million due to additional debt that the Company
entered into during the first six months of 2006.  See  discussion of cash flows
from Financing  Activities that follows  regarding the Company's new borrowings.
In addition, interest rates were higher in the first six months of 2006 compared
to the first six months of 2005.  These increases were partially  offset because
the Company's 10 1/2% Senior Notes, which accrued interest of approximately $1.8
million in the first quarter of 2005, were cancelled and annulled as part of the
Company's  Chapter  11 Plan of  Reorganization,  and thus,  the  Company  had no
associated interest expense in 2006.

      In the first six months of 2005,  the  Company  recorded  $4.6  million of
costs related to Chapter 11 filing and reorganization  expenses, which represent
expenses incurred by WHX because of its  reorganization  under Chapter 11 of the
U.S. Bankruptcy Code. Such expenses principally consist of professional fees for
services provided by debtor and creditor professionals directly related to WHX's
reorganization proceedings.

      Realized and unrealized losses on derivatives  totaled $4.5 million in the
first six months of 2006,  compared  to $0.5  million in the first six months of
2005.  The  derivative  instruments  utilized by the Company are precious  metal
forward contracts.  The increase in the loss resulted principally from a greater
increase in precious  metal prices  during the first six months of 2006 compared
to the first six months of 2005.

      In the first six months of 2006 and 2005, a tax  provision of $1.2 million
and $0.9 million,  respectively,  was recorded for state and foreign taxes.  The
Company recorded a valuation  allowance  related to the tax benefits  associated
with its  operating  losses in each period due to the  uncertainty  of realizing
these benefits in the future.

      The Loss from Discontinued  Operations of $0.2 million and $3.4 million in
the first six months of 2006 and 2005,  respectively,  relates to the  Company's
wire and cable business,  which had been part of the Wire and Tubing segment. In
2004  the  Company  evaluated  the  current  operating  plans  and  current  and
forecasted operating results of its wire and cable business.  In accordance with
SFAS No. 144,  "Accounting for Impairment or Disposal of Long-Lived Assets", the
Company determined that there were indicators of impairment based upon continued
operating  losses,  deteriorating  margins,  and rising raw material  costs.  An
estimate of future cash flows indicated that cash flows would be insufficient to
support the carrying value of the long-term assets of the business. Accordingly,
these assets were written down to their estimated fair value in 2004. On January
13, 2005, the Company decided to


                                       28



permanently  close the wire and cable  businesses.  The Company  operated  these
facilities  on a limited  basis in the first quarter of 2005 in order to fulfill
customer commitments.  In the second quarter of 2005, all operations of the wire
and cable business were concluded. Accordingly, these businesses are reported as
discontinued operations.  The $3.4 million loss for the first six months of 2005
reflects a $4.1 million operating loss offset by a $0.7 million gain on the sale
of fixed assets.

      The comments that follow compare  revenues and operating income by segment
for the first six months of 2006 and 2005:

PRECIOUS METAL

      Sales for the Precious Metal segment  increased  $16.5 million,  or 27.7%,
from $59.6 million in 2005 to $76.1  million in 2006,  driven mainly by precious
metal price increases.  In addition,  higher volume also occurred with increased
sales  to  existing  customers  as  well  as to  new  customers  because  of new
distribution and sales force initiatives.

      Operating income for the Precious Metal segment  increased $3.5 million to
$4.9 million in 2006 from $1.4 million in 2005.  This  resulted  from  increased
sales, a more favorable mix of fabrication (higher margin) versus plating (lower
margin)  revenues in the first six months of 2006  compared to 2005,  and a $1.7
million  favorable  effect on segment gross profit from  liquidation of precious
metal inventories valued at LIFO cost in the first six months of 2006.

TUBING

      In the first six months of 2006,  sales for the Tubing  Segment  increased
$5.7  million,  or 10.0%,  from $57.0  million in 2005 to $62.7 million in 2006,
principally due to market share increase.  On May 9, 2006, the Company announced
the  closure of the  Norristown,  Pennsylvania  facility of the H&H Tube Co. The
facility  continued to operate during the second quarter and sales  increased by
$2.0 million in the first six months of 2006 compared to 2005,  principally  due
to special  non-recurring  sales and  accelerated  shipment of product  prior to
shutdown.

      Operating income decreased by $5.4 million despite the sales increase,  to
a loss of $3.7 million in the first six months of 2006 from operating  income of
$1.7  million  in the same  period of 2005.  Included  in the 2006 loss was $1.9
million in restructuring  costs and a $1.8 million asset impairment  charge both
relating  to  the  closing  of  the  Norristown   facility  In  addition,   cost
inefficiencies  at the Company's new Mexican tubing facility also contributed to
the operating loss in the current six month period.

ENGINEERED MATERIALS

      Sales for the Engineered  Materials  Segment  increased $14.3 million,  or
16.8%,  from $84.9  million in the first six months of 2005 to $99.2  million in
the same period of 2006 due to increased volume in all product lines.  Partially
offsetting  these  increases  were selling  price  reductions  at the  segment's
electrogalvanized steel unit.

      Operating income increased in the first six months of 2006 by $1.3 million
from $7.2  million  in 2005 to $8.5  million  in 2006  primarily  because of the
higher sales  volume.  However,  an increase in selling  expenses and  marketing
personnel offset part of this increase.

UNALLOCATED CORPORATE EXPENSES

      Unallocated corporate expenses declined from $3.3 million in the first six
months  of 2005 to $1.7  million  in the first six  months of 2006.  There  were
reductions in the costs for executive salaries, insurance, and Board of Director
fees and  expenses.  The  Company's  pension  credit rose by $1.1 million in the
first six months of 2006 compared to the same period in 2005 principally because
pension benefits were frozen for  substantially  all non-union  employees at the
end of 2005.


                                       29


DISCUSSION OF THE CONSOLIDATED STATEMENT OF CASH FLOWS

      As of June 30, 2006,  the Company's  current assets totaled $140.6 million
and its current liabilities totaled $161.0 million; a working capital deficit of
$20.4 million.  The Company's  working  capital deficit at December 31, 2005 was
$121.5  million.  As of December 31,  2005,  all debt other than $4.9 million of
foreign debt was  classified as current due to  noncompliance  with certain debt
covenants. As of June 30, 2006, such debt has been classified as long-term since
the  Company  is no longer in  default  on the debt as a result of the March 29,
2007 Amendment and Waiver to the Loan and Security  Agreements  (see  discussion
under liquidity).

      Net cash used by  operating  activities  for the six months ended June 30,
2006  totaled  $12.2  million.  Net loss from  operations  adjusted for non-cash
income and expense items provided $5.0 million of cash. Working capital accounts
used $16.5 million of cash, as follows:  Accounts receivable used $12.3 million,
inventories  provided $1.4 million, and net other current assets and liabilities
used $5.6 million.  Cash used by operating activities in the first six months of
2005 totaled $8.9  million,  and  principally  was caused by the net loss of the
period,  as well as seasonal  working  capital  needs for inventory and accounts
receivable,  but was favorably impacted by $11.5 million from the liquidation of
the net  current  assets  of the  discontinued  operation,  the wire  and  cable
business.

       In the first six months of 2006, inventory provided $1.4 million, whereas
$2.3  million  was  used in the  comparable  first  six  month  period  of 2005.
Inventories  totaled $59.8 million at June 30, 2006, a decrease of $1.2 million,
or 2.0%, as compared to December 31, 2005.  During the first six months of 2006,
the Company reduced its quantities of precious  metals in inventory  principally
because of the  wind-down  of the HHEM  business  and because of the sale of its
interest in a Singapore operation.

      The use of funds due to accounts  receivable  in both the first six months
of 2006 and 2005 ($12.3 million and $14.2 million,  respectively)  was caused by
an increase in accounts  receivable  which resulted from higher sales levels for
that  respective  quarter  compared to the fourth quarter of the prior year. Net
sales in the second  quarter of 2006 were $125.2  million,  as compared to $99.2
million in the fourth quarter of 2005, an increase of $26.0  million.  Net sales
in the second quarter of 2005 were $105.6 million,  as compared to $84.2 million
in the fourth quarter of 2004; an increase of $21.4 million.

       Net other current assets and  liabilities  used $5.6 million of cash flow
in the first six months of 2006 and $2.9 million in the same period of 2005. The
increase  was  partially  driven by cash used for the payment of $8.0 million of
environmental  remediation  costs  during the 2006  period,  as compared to $2.6
million  during the first six months of 2005. In addition,  payments to fund the
WHX Pension  Plan  totaling  $4.1  million  were made in the first six months of
2006. This was partially offset by $2.1 million of Chapter  11-related  expenses
paid in the first six months of 2005.

      Investing  activities  used $8.1  million in the first six months of 2006,
compared to $9.7 million in the same period of 2005.  The decrease was driven by
reduced capital  spending in 2006. In the first six months of 2006, $4.8 million
was spent on capital improvements, as compared to $10.4 million in the first six
months of 2005. The higher capital spending in 2005 was principally related to a
plant  expansion at H&H's  fastener  facility in Agawam,  MA. This was partially
offset  by $4.8  million  of net cash  paid out for  precious  metal  derivative
contracts in 2006, compared to $0.5 million in 2005.

      Financing  activities  provided $21.1 million of net cash in the first six
months of 2006,  principally  from new  borrowings,  which totaled $26.0 million
during the period.  The increase in debt between December 31, 2005 and March 31,
2006  consists of the  following:  On December  29,  2005,  H&H entered  into an
amendment to its Term B Loan with Steel.  This  amendment  provided  for,  among
other things, an increase of the Term B Loan in January 2006 by $10 million.  On
January 24, 2006, H&H's wholly-owned  subsidiary,  OMG, Inc. entered into a loan
agreement with Sovereign Bank for $8.0 million,  collateralized by a mortgage on
OMG, Inc.'s real property.  On March 31, 2006, H&H and Steel  Partners,  II L.P.
agreed to an increase  in the Term B Loan in the amount of $9.0  million and the
prepayment  in the same amount of a portion of H&H's  subordinated  intercompany
promissory note issued to WHX.  Financing  activities  provided $10.8 million in
the first six months of 2005, principally from additional net drawdowns on H&H's
revolving credit facility.

RECENT DEVELOPMENTS AND LIQUIDITY

      Since the  filing  of its  Annual  Report on Form 10-K for the year  ended
December 31, 2005, the following significant events have occurred:


                                       30


PENSION PLAN

      On December 20, 2006, the Internal  Revenue  Service granted a conditional
waiver  (the "IRS  Waiver")  of the  minimum  funding  requirements  for the WHX
Pension  Plan for the 2005 plan year in  accordance  with section 412 (d) of the
Internal  Revenue  Code and section 303 of the  Employee  Retirement  Income and
Security Act of 1974, as amended ("ERISA"),  and on December 28, 2006, WHX, H&H,
and the  Pension  Benefit  Guaranty  Corporation  (the  "PBGC")  entered  into a
settlement  agreement (the "PBGC  Settlement  Agreement") in connection with the
IRS  Waiver  and  certain  other  matters.  The IRS Waiver is subject to certain
conditions,  including a requirement  that the Company meet the minimum  funding
requirements  for the WHX Pension  Plan for the plan years  ending  December 31,
2006 through 2010, without applying for a waiver of such requirements.  The PBGC
Settlement  Agreement  and related  agreements  include the  following:  (i) the
amortization of the waived amount of $15.5 million (the "Waiver  Amount") over a
period of five years, (ii) the PBGC's consent to increase borrowings under H&H's
senior  credit  facility to $125  million in  connection  with the closing of an
acquisition  described below, (iii) the resolution of any potential issues under
Section  4062(e) of ERISA,  in  connection  with the  cessation of operations at
certain  facilities  owned  by WHX,  H&H or  their  subsidiaries,  and  (iv) the
granting  to the  PBGC  of  subordinate  liens  on the  assets  of H&H  and  its
subsidiaries,  and specified assets of WHX, to collateralize WHX's obligation to
pay the Waiver  Amount to the WHX Pension Plan and to make  certain  payments to
the WHX Pension  Plan in the event of its  termination.  As a result of the PBGC
Settlement  Agreement and the IRS Waiver, based on estimates from WHX's actuary,
the Company expects its minimum  funding  requirement for the specific plan year
and the  amortization of the 2005  requirement to be $13.1 million (paid in full
in 2006),  $10.8  million,  $11.0 million,  $8.9 million,  $7.0 million and $2.3
million (which amounts reflect the recent passage of the Pension  Protection Act
of 2006) in 2006, 2007, 2008, 2009, 2010 and 2011, respectively.

AMENDMENTS TO CREDIT AGREEMENTS

      On December 27, 2006,  Wachovia Bank,  National  Association  ("Wachovia")
provided  H&H with an  additional  $7.0  million  loan.  This was pursuant to an
amendment signed on October 30, 2006 which made the additional funds conditional
upon the filing of the Company's 2005 Annual Report on Form 10-K.

      On December 28, 2006, H&H and certain of H&H's subsidiaries  amended their
Loan and Security  Agreement with Wachovia and their Loan and Security Agreement
with Steel  Partners  II, L.P.  ("Steel")  (the  beneficial  holder of 5,029,793
shares of the Company's common stock,  representing  approximately  50.3% of the
outstanding  shares) to  provide,  in part,  for:  (i) the  consummation  of the
transactions  contemplated  by the PBGC  Settlement  Agreement and the waiver of
possible  events of  default  that may have  occurred  relating  to the  matters
covered  by the PBGC  Settlement  Agreement;  and (ii) a $42  million  term loan
funded by Ableco  Finance  LLC. A portion of the loan ($26  million) was used to
fund an acquisition  by H&H, $3.2 million was paid as a contribution  to the WHX
Pension Plan, and approximately $12 million of the loan was used to reduce H&H's
outstanding balance under its revolving credit facility.

      On March 29,  2007,  H&H and  certain of H&H's  subsidiaries  amended  the
respective Loan and Security  Agreements with Wachovia and Steel to, among other
things,  (i) amend the  definition  of  EBITDA,  (ii) reset the levels and amend
certain of the financial  covenants,  (iii) extend the  termination  date of the
credit  facilities  from  March  31,  2007 to June 30,  2008,  (iv)  permit  the
extension  by H&H to WHX of an  unsecured  loan  for  required  payments  to the
pension plan, under certain  conditions,  and (v) permit the extension by H&H to
WHX of an unsecured loan for other uses in the aggregate principal amount not to
exceed $3.5 million under certain  conditions.  The amendments also provided for
the pledge of 65% of all  outstanding  securities of Indiana Tube Danmark A/S, a
Danish   corporation   and  a   wholly-owned   subsidiary   of  Handy  &  Harman
International,   Ltd.,  and  Protechno,   S.A.,  a  French   corporation  and  a
wholly-owned  subsidiary of Indiana Tube Danmark A/S.  Finally,  the  amendments
also provided for waivers of certain events of default  existing as of March 29,
2007.

ACQUISITIONS

      Pursuant to an Asset Purchase  Agreement (the "Asset Purchase  Agreement")
dated as of December 28, 2006, a subsidiary of H&H acquired a mechanical roofing
fastener business. The purchase price was approximately $26 million, including a
working capital  adjustment.  The assets acquired included,  among other things,
machinery, equipment, inventories of raw materials, work-in-process and finished
products,  certain  contracts,  accounts  receivable and  intellectual  property
rights,  all as related to the  acquired  business  and as provided in the Asset
Purchase Agreement.  This acquired business develops and manufactures  fastening
systems for the  commercial  roofing  industry.  WHX believes  this  acquisition


                                       31


solidifies  its position as a leading  manufacturer  and supplier of  mechanical
fasteners,  accessories  and  components,  and  building  products for the North
American commercial and residential  construction industry. Funds for payment of
the purchase  price by H&H were  obtained  pursuant to the  aforementioned  term
loan.

      On April 12, 2007, Steel Partners II, L.P.  ("Steel"),  a Delaware limited
partnership,  and  WHX  entered  into a Stock  Purchase  Agreement  whereby  WHX
acquired  Steel's entire interest in BZ Acquisition  Corp.  ("BZA"),  a Delaware
corporation  and  wholly  owned  subsidiary  of Steel (the "BZA  Transfer")  for
$10.00.  In addition,  WHX agreed to reimburse all reasonable  fees and expenses
incurred by Steel in  connection  with the Offer and the Merger (each as defined
below). BZA is the acquisition subsidiary in a tender offer to acquire up to all
of  the  outstanding  stock  of  Bairnco  Corporation,  a  Delaware  corporation
("Bairnco") for $13.50 per share in cash. Steel  beneficially owns approximately
50.3% of WHX's outstanding common stock.

      Steel, BZA, and Bairnco entered into an Agreement and Plan of Merger dated
as of February 23, 2007 (the "Merger Agreement"),  pursuant to which BZA amended
its tender offer to acquire all of the outstanding common shares of Bairnco at a
price of $13.50  per share in cash  (the  "Offer").  In  addition,  all  Bairnco
shareholders  of record on March 5, 2007 continued to be entitled to receive the
declared first quarter  dividend of $0.10 per share,  for total cash proceeds of
$13.60 per share.  On April 13, 2007,  upon the expiration of the Offer pursuant
to the Merger  Agreement,  BZA acquired  approximately  88.9% of the outstanding
common stock of Bairnco.

      Pursuant to the Merger  Agreement,  on April 24, 2007, BZA was merged with
and into Bairnco with  Bairnco  continuing  as the  surviving  corporation  as a
wholly owned  subsidiary of WHX (the  "Merger").  At the  effective  time of the
Merger,  each Bairnco common share then outstanding  (other than shares owned by
BZA or its direct parent  entity,  shares owned by Bairnco as treasury stock and
shares held by stockholders  who properly  exercise their appraisal  rights) was
automatically  converted  into the  right to  receive  $13.50  per share in cash
without interest and subject to applicable withholding taxes.  Immediately prior
to the  Merger,  BZA held  approximately  90.1%  of the  outstanding  shares  of
Bairnco.  The  proceeds  required  to fund  the  closing  of the  Offer  and the
resulting Merger and to pay related fees and expenses were approximately  $101.5
million.

      In  connection  with the  closing  of the  Offer,  initial  financing  was
provided by Steel through two facilities.  Steel extended to BZA bridge loans in
principal amount of approximately $75.1 million, $1.4 million, and $10.0 million
(and  may  extend  additional  loans of  approximately  $3.6  million,  up to an
aggregate  total amount of borrowings of $90.0  million)  pursuant to a Loan and
Security  Agreement (the "Bridge Loan Agreement"),  between BZA and Bairnco,  as
borrowers,  and Steel,  as lender.  In addition,  Steel  extended to WHX a $15.0
million  subordinated  loan, which is unsecured at the WHX level,  pursuant to a
Subordinated Loan and Security Agreement (the "Subordinated Loan Agreement" and,
together with the Bridge Loan Agreement, the "Loan Agreements"), between WHX, as
borrower,  and Steel, as lender.  WHX contributed the $15.0 million  proceeds of
the subordinated loan to BZA as a capital contribution.

      The Bridge  Loan  Agreement  provides  for bridge  term loans of up to $90
million  from  Steel to BZA,  which  were  assumed by Bairnco as a result of the
Merger.  Borrowings  under the Bridge Loan Agreement bear (i) cash interest at a
rate per annum  equal to the prime  rate of JP Morgan  Chase plus 1.75% and (ii)
pay-in-kind interest at a rate per annum equal to 4.5% for the first 90 days the
initial  loan is  outstanding  and 5%  (instead  of 4.5%) for the balance of the
term, each as adjusted from time to time. The minimum aggregate interest rate on
borrowings  under the Bridge Loan  Agreement is 14.5% per annum for the first 90
days the initial loan is  outstanding,  and 15% (instead of 14.5%) per annum for
the balance of the term, and the maximum  aggregate  interest rate on borrowings
under the Bridge Loan Agreement is 18% per annum. The cash interest rate and the
pay-in-kind  interest  rate may be adjusted  from time to time,  by agreement of
Steel and  Bairnco,  so long as the  aggregate  interest  rate remains the same.
Interest  is  payable  monthly in  arrears.  Obligations  under the Bridge  Loan
Agreement are guaranteed by certain of Bairnco's  subsidiaries  and secured by a
junior lien on the assets of Bairnco and certain of its subsidiaries and capital
stock of certain of Bairnco's  subsidiaries.  Obligations  under the Bridge Loan
Agreement  are  also  guaranteed  by the  Company  on an  unsecured  basis.  The
scheduled  maturity date of the indebtedness  under the Bridge Loan Agreement is
the earlier to occur of (i) June 30, 2008 and (ii) such time as Bairnco  obtains
any replacement  financing.  Indebtedness under the Bridge Loan Agreement may be
prepaid without penalty or premium.

      The Subordinated  Loan Agreement  provides for a subordinated term loan of
$15 million from Steel to WHX,  which is unsecured at the WHX level.  Borrowings
under the Subordinated  Loan Agreement bear  pay-in-kind  interest at a rate per
annum equal to the prime rate of JP Morgan Chase plus 7.75%,  adjusted from time
to time,  with a minimum  interest rate of 16% per annum and a maximum  interest
rate of 19% per annum. Interest is payable monthly in arrears. Obligations under


                                       32


the  Subordinated  Loan  Agreement are  guaranteed by Bairnco and certain of its
subsidiaries  and  secured by a junior lien on the assets of Bairnco and certain
of its subsidiaries and capital stock of certain of Bairnco's subsidiaries.  The
indebtedness  under the  Subordinated  Loan  Agreement will mature on the second
anniversary of the issuance of the subordinated  loan and may be prepaid without
penalty or premium.

      The  Loan  Agreements  contain  customary   representations,   warranties,
covenants,  events of default and indemnification  provisions.  The indebtedness
under  the  Bridge  Loan  Agreement  and  the  related  security   interests  is
subordinated to the indebtedness and related  security  interests  granted under
Bairnco's  existing  senior  credit  facility  with Bank of  America,  N.A.  The
guarantees of the  indebtedness  under the  Subordinated  Loan Agreement and the
related  security  interests is  subordinated to all  indebtedness  and security
interests described in the preceding sentence.

      Bairnco  operates two core  businesses - Arlon and Kasco.  Arlon  designs,
manufactures,  and sells engineered materials and components for the electronic,
industrial  and  commercial  markets.  Kasco is a leading  provider of meat-room
products  and  maintenance  services  for  the  meat  and  deli  departments  of
supermarkets;  restaurants;  meat,  poultry  and  fish  processing  plants;  and
manufacturers   and  distributors  of  electrical  saws  and  cutting  equipment
throughout North America,  Europe, Asia and South America. WHX believes that the
acquisition of Bairnco will be beneficial  because of Bairnco's strong positions
in niche engineered  materials markets, and that it will improve Bairnco's plant
level operations,  profit margins and working capital. The results of operations
and  assets of Bairnco  will be  included  in the  financial  statements  of WHX
beginning in the second quarter of 2007.

SALE OF ASSETS

      On March 4, 2007, the Company sold certain assets,  including the land and
building,  certain machinery and equipment,  and inventory of its Handy & Harman
Electronic Materials Corporation subsidiary,  located in East Providence,  Rhode
Island,  as well as  certain of its assets  and  inventory  located in  Malaysia
(collectively  referred to as "HHEM") for net  proceeds  of  approximately  $3.9
million.  In December 2006, the Company recorded an asset  impairment  charge of
$3.4 million  relating to the long-lived  assets offered for sale, in accordance
with SFAS No. 144,  "Accounting  for the  Impairment  or Disposal of  Long-Lived
Assets".  The amount of the  impairment  loss was based upon the actual  selling
price of the long-lived  assets in March 2007. In the Company's balance sheet as
of December 31, 2006,  the long-lived  assets were  classified as current assets
held for sale.  Due to the charge for the long-lived  asset  impairment in 2006,
the Company  recognized  no gain or loss upon sale of the  long-lived  assets in
2007. However, upon sale, the Company recognized a loss of $0.9 million relating
to the sale of  inventory.  The  Company  has  retained  responsibility  for any
environmental conditions requiring remediation at the HHEM site.

LIQUIDITY

      Throughout 2005 and 2006, the Company experienced  liquidity issues, which
are  more  fully  described  in  Notes  1a and 2 to the  consolidated  financial
statements  included  in the  Annual  Report  on Form  10-K for the  year  ended
December  31,  2005.  The  Company  incurred  consolidated  net  losses of $34.7
million,  $140.4  million and $159.9  million for the years ended  December  31,
2005, 2004 and 2003,  respectively,  and had negative cash flows from operations
of $5.0  million and $39.6  million for the years  ended  December  31, 2005 and
2004,  respectively.  As of December  31, 2005,  the Company had an  accumulated
deficit of $394.0  million  and a working  capital  deficit  of $121.5  million.
Additionally,  the Company has not been in  compliance  with certain of its bank
covenants.  Note 1A to the  consolidated  financial  statements  included in our
Annual  Report on Form 10-K for the year ended  December  31,  2005  describes a
number of conditions concerning the Company's liquidity difficulties, and states
that these conditions  raise  substantial  doubt about the Company's  ability to
continue as a going concern.

      WHX is a  holding  company  and  has as  its  sole  source  of  cash  flow
distributions  from  its  operating  subsidiaries,  H&H and  Bairnco,  or  other
discrete  transactions.  H&H's bank credit facilities and term loans effectively
do not permit it to transfer any cash or other assets to WHX (with the exception
of  unsecured  loans to be used to make  required  contributions  to the pension
plan, and for other uses of an unsecured loan in the aggregate  principal amount
not to exceed $3.5 million under certain conditions),  and are collateralized by
substantially  all of H&H's assets.  . Bairnco's  revolving credit facility with
Bank of America,  N.A.  permits  distributions  by Bairnco to WHX under  certain
conditions.  WHX has no bank credit facility of its own. WHX's ongoing operating
cash flow requirements  consist of funding the minimum  requirements for the WHX
Pension Plan and paying other administrative costs.

      Since  emerging from  bankruptcy,  due to covenant  restrictions  in H&H's
credit  facilities,  there  have  been no  dividends  from H&H to WHX and  WHX's
sources of cash flow have consisted of:


                                       33


         o  The issuance of $5.1 million in preferred  stock by a newly  created
            subsidiary (WHX CS Corp.) in October 2005, which was invested in the
            equity of a public company (Cosine Communications Inc.); and

         o  partial payment of the H&H subordinated debt to WHX of $9.0 million,
            which  required the approval of the banks  participating  in the H&H
            bank facility. Subsequent to this transaction in 2006, the remaining
            intercompany  loan balance of the subordinated debt of $44.2 million
            was converted to equity.

         o  As permitted by the March 29, 2007  Amendment and Waiver to the Loan
            and Security  Agreements,  an  unsecured  loan from H&H for required
            payments to the  pension  plan,  and for other uses of an  unsecured
            loan in the  aggregate  principal  amount not to exceed $3.5 million
            under certain conditions.

         o  A  $15.0  million   subordinated  loan  from  Steel  pursuant  to  a
            Subordinated  Loan and Security  Agreement between WHX, as borrower,
            and Steel,  as lender.  WHX used the $15.0  million  proceeds of the
            subordinated loan as a capital contribution to acquire Bairnco.

      As of December 31, 2006, WHX and its unrestricted subsidiaries had cash of
approximately  $0.8  million  and  current  liabilities  of  approximately  $7.5
million,  including  $5.1 million of  mandatorily  redeemable  preferred  shares
payable  to a related  party.  H&H's  availability  under its  revolving  credit
facility and other  facilities  as of December 31, 2006 was $19.1 million and as
of March  31,  2007  was  approximately  $15.5  million.  All  such  facilities,
including  the term  loans,  were set to expire in March 31, 2007  (although  by
amendment signed on March 29, 2007, were extended until June 30, 2008).

      In  connection  with the  closing of the  Bairnco  Offer and the Merger on
April  24,  2007,  Bairnco  became a  wholly-owned  subsidiary  of WHX.  Initial
financing was provided by Steel through two facilities,  as discussed  above, in
the approximate  aggregate  amount of $101.5 million.  In addition,  the Bairnco
Revolving  Credit  Facility  was amended to permit the closing of the Merger and
related  financing  transactions.  The availability  under the Bairnco Revolving
Credit Facility on March 31, 2007 was approximately  $12.0 million.  The Bairnco
Revolving Credit Facility permits  distributions by Bairnco to WHX under certain
conditions, as described in Note 21 to the consolidated financial statements.

      In addition to the obligations  under the current credit  facilities,  the
Company also has significant cash flow obligations, including without limitation
the  amounts due for the WHX  Pension  Plan (as  amended by the PBGC  Settlement
Agreement  entered into December 28, 2006).  There can be no assurance  that the
funds  available  from  operations  and  under  its  credit  facilities  will be
sufficient to fund pension  funding  requirements,  debt service costs,  working
capital demands and environmental remediation costs. Additionally,  there can be
no assurances that the Company will be able to obtain  replacement  financing at
commercially  reasonable terms upon the expiration of the H&H and Bairnco credit
facilities in June 2008.

      Nevertheless, as discussed further below, the Company believes that recent
new and amended  financing  arrangements,  acquisitions,  the IRS Waiver and the
PBGC Settlement Agreement,  the sale of a non-essential  operating unit, as well
as recent improvements in its core operations, and the substantial completion of
a major  remediation of property relating to certain  environmental  liabilities
should  permit the Company to generate  sufficient  working  capital to meet its
obligations  as they  mature  over the next  twelve  months.  The ability of the
Company to meet its cash  requirements  over this time period is  dependent,  in
part, on the Company's  ability to meet its business plan.  Management  believes
that  existing  capital  resources  and  sources  of credit,  including  the H&H
facilities  and the  Bairnco  facilities,  are  adequate to meet its current and
anticipated cash requirements.  The Company also continues to examine all of its
options  and  strategies,   including  acquisitions,   divestitures,  and  other
corporate transactions, to increase cash flow and stockholder value. However, if
the Company's  cash needs are greater than  anticipated  or the Company does not
materially  satisfy  its  business  plan,  the  Company  may be required to seek
additional or alternative financing sources. There can be no assurance that such
financing will be available or available on terms acceptable to the Company.

      As more fully  described  earlier in this Recent  Developments  section of
Management's  Discussion  and  Analysis of  Financial  Condition  and Results of
Operations,  the Company has taken the following  actions which it believes will
improve liquidity and help provide for adequate  liquidity to fund the Company's
capital needs for the next twelve months.

  o   On December 20, 2006,  the IRS granted a  conditional  waiver of the $15.5
      million minimum funding  requirement for the WHX Pension Plan for the 2005
      plan year and on December  28, 2006,  WHX,  H&H, and the PBGC entered into
      the PBGC  Settlement  Agreement  in  connection  with the IRS  Waiver  and
      certain other matters.  As a result of the PBGC  Settlement  Agreement and
      the IRS Waiver, based on estimates from WHX's actuary, the Company expects
      its  minimum  funding  requirement  for the  specific  plan  year  and the
      amortization of the 2005  requirement to be $13.1 million (paid in full in
      2006), $10.8 million,  $11.0 million,  $8.9 million, $7.0 million and $2.3
      million  (which  amounts   reflect  the  recent  passage  of  the  Pension
      Protection  Act of  2006) in  2006,  2007,  2008,  2009,  2010  and  2011,
      respectively.


                                       34


  o   Availability  under H&H's Loan and Security  Agreements'  revolving credit
      facility as of December  31, 2006 was $19.1  million,  and as of March 31,
      2007,  was  approximately  $15.5  million.  On March  29,  2007,  all such
      facilities, including the term loans, were amended to (i) redefine EBITDA,
      (ii) reset the levels and amend certain of the financial covenants,  (iii)
      extend the termination  date of the credit  facilities from March 31, 2007
      to June 30, 2008,  (iv) permit the extension by H&H to WHX of an unsecured
      loan for required payments to the pension plan, under certain  conditions,
      and (v) permit the extension by H&H to WHX of an unsecured  loan for other
      uses in the  aggregate  principal  amount not to exceed $3.5 million under
      certain conditions.

  o   Following  the closing of the Bairnco  Merger,  upon the  satisfaction  of
      certain conditions,  Bairnco is permitted to make distributions to WHX. As
      of March  31,  2007,  availability  under  the  Bairnco  Revolving  Credit
      Facility was approximately  $12.0 million,  although there is no assurance
      that such amount will be available in the future,  or if  available,  that
      Bairnco will satisfy the conditions for distributing this amount to WHX.

  o   The  acquisition by a subsidiary of H&H of a mechanical  roofing  fastener
      business  for  approximately  $26  million,  including  a working  capital
      adjustment,  on December  28,  2006,  which we believe  will prove to be a
      valuable  acquisition  which will  solidify  H&H's  position  as a leading
      manufacturer  and  supplier  of  mechanical  fasteners,   accessories  and
      components,  and building  products for the North American  commercial and
      residential construction industry.

  o   The  sale in  March  2007  of a  non-core  business  which  had  generated
      operating losses in the past year.

  o   The substantial  completion of remediation of property relating to certain
      environmental liabilities.

      In view of the matters described in the preceding  paragraphs,  management
believes that the Company has the ability to meet its financing  requirements on
a continuing  basis.  However,  if the  Company's  fiscal 2007 planned cash flow
projections  are not met,  management  could  consider the  reduction of certain
discretionary expenses and sale of certain assets. In the event that these plans
are not sufficient and the Company's  credit  facilities are not available,  the
Company's ability to operate could be adversely affected.

                                     *******

      When  used  in  the  Management's   Discussion  and  Analysis,  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 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 and, 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 3.     QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

      Please see  "Quantitative  and Qualitative  Disclosures About Market Risk"
from the Company's  Annual  Report on Form 10-K for the year ended  December 31,
2005.


                                       35


ITEM 4.     CONTROLS AND PROCEDURES

      EVALUATION  OF  DISCLOSURE  CONTROLS AND  PROCEDURES.  As required by Rule
13a-15(b) under the Securities Exchange Act of 1934, as amended,  (the "Exchange
Act")  we  conducted  an  evaluation   under  the   supervision   and  with  the
participation of our management,  including the Chief Executive  Officer and the
Chief Financial  Officer,  of the  effectiveness of our disclosure  controls and
procedures  as of the end of the period  covered by this  report.  Based on that
evaluation we identified certain material  weaknesses in our disclosure controls
and procedures  (discussed below), and the Chief Executive Officer and the Chief
Financial  Officer  concluded that as of June 30, 2006, our disclosure  controls
and procedures were not effective in ensuring that all  information  required to
be  disclosed  in  reports  that we file or  submit  under the  Exchange  Act is
recorded,  processed,  summarized and reported within the time periods specified
in the SEC  rules  and  forms  and that  such  information  is  accumulated  and
communicated to our management,  including our Chief Executive Officer and Chief
Financial Officer,  in a manner that allows timely decisions  regarding required
disclosure.

      As more  fully  described  in  Management's  Discussion  and  Analysis  of
Financial Condition and Results of Operations and in Note 1b to the Consolidated
Financial  Statements  included  in our 2004  Annual  Report on Form  10-K,  the
Company  determined it was necessary to restate its 2003,  2002 and prior years'
audited   consolidated   financial   statements,   and  its  unaudited   interim
consolidated financial statements for all quarters in 2004 and 2003.

      Notwithstanding the existence of the material weaknesses  discussed below,
the  Company's   management  has  concluded  that  the  consolidated   financial
statements  included in this Form 10-Q fairly present, in all material respects,
the Company's financial  position,  results of operations and cash flows for the
interim and annual  periods  presented in  conformity  with  generally  accepted
accounting principles.

      Although  we are not  currently  required  to  assess  and  report  on the
effectiveness  of our internal  control  over  financial  reporting  under Rules
13a-15 and 15d-15 of the Exchange  Act,  management  is required to evaluate the
effectiveness  of our disclosure  controls and procedures  under Rule 13a-15(b).
Because of its inherent limitations,  internal controls over disclosure controls
and procedures may not prevent or detect misstatements. Also, projections of any
evaluation of  effectiveness to future periods are subject to the risk that such
controls may become  inadequate  because of changes in  conditions,  or that the
degree  of  compliance  with  such   disclosure   controls  and  procedures  may
deteriorate.

      A material  weakness is a control  deficiency,  or  combination of control
deficiencies  that  results  in more than a remote  likelihood  that a  material
misstatement of the annual or interim financial statements will not be prevented
or detected.  As of June 30, 2006,  we have  concluded  that the Company did not
maintain  effective  disclosure  controls and  procedures  due to the  following
material weaknesses:

            (a) We did not  maintain  active  supervision  over  the  accounting
            functions at our operating subsidiaries.

            (b) We did not  maintain a sufficient  number of  personnel  with an
            appropriate  level of  knowledge,  experience  and  training  in the
            application of generally accepted accounting principles commensurate
            with the Company's global financial  reporting  requirements and the
            complexity of our operations and transactions.

            (c)  We did  not  maintain  appropriately  designed  and  documented
            company-wide policies and procedures.

            (d) We did not maintain an effective  anti-fraud program designed to
            detect and prevent fraud, including (i) an effective  whistle-blower
            program,  and (ii) an  ongoing  program to manage  identified  fraud
            risks.

      These material weaknesses contributed to the material weaknesses discussed
in items 1 to 6 below and the resulting  restatement of our annual  consolidated
financial  statements  for 2003 and prior years,  restatement  of the  unaudited
consolidated   quarterly  financial   statements  for  2004  as  well  as  audit
adjustments to the 2005 and 2004 annual  consolidated  financial  statements and
the 2005 unaudited  consolidated  quarterly financial statements.  Additionally,
these control deficiencies could result in a material misstatement in any of the
Company's  accounts or disclosures that would result in a material  misstatement
of the annual or interim  consolidated  financial  statements  that would not be
prevented  or  detected.  As of June 30,  2006,  we did not  maintain  effective
controls over:


                                       36


      (1) the accuracy,  valuation and disclosure of our goodwill and intangible
asset  accounts  and the  related  impairment  expense  accounts.  Specifically,
effective  controls  were not  designed  and in place to ensure that an adequate
periodic impairment analysis was conducted,  reviewed,  and approved in order to
identify and accurately record  impairments as required under generally accepted
accounting  principles.  This control deficiency  resulted in the restatement of
our annual consolidated  financial  statements for 2003 and prior years, and the
unaudited quarterly consolidated financial statements for 2004, as well as audit
adjustments to the annual 2004 consolidated financial statements.  Additionally,
this control  deficiency  could result in a material  misstatement  of goodwill,
intangible assets and related impairment expense accounts that would result in a
material misstatement of the annual or interim consolidated financial statements
that would not be prevented or detected. Accordingly,  management has determined
that this control deficiency constitutes a material weakness.

      (2) the  accounting  for income  taxes,  including  the  completeness  and
accuracy of income taxes payable,  deferred  income tax assets,  liabilities and
related valuation allowances and the income tax provision.  Specifically, we did
not  appropriately  apply  generally  accepted  accounting   principles  in  the
estimation  of tax reserves and the  recording of valuation  allowances  against
deferred tax assets. Additionally, we did not have effective controls to monitor
the difference between the income tax basis and the financial reporting basis of
assets and  liabilities  and  reconcile the  difference  to deferred  income tax
assets and liabilities.  This control deficiency  resulted in the restatement of
the annual  consolidated  financial  statements for 2003 and prior years and all
unaudited  quarterly  consolidated  financial  statements  for  2004  and  audit
adjustments to the annual  consolidated  financial  statements for 2005 and 2004
and  the   2005   unaudited   consolidated   quarterly   financial   statements.
Additionally, this control deficiency could result in a material misstatement of
income taxes payable,  deferred  income tax assets and  liabilities,  income tax
provision  and other  comprehensive  income  that  would  result  in a  material
misstatement  of the annual or interim  consolidated  financial  statements that
would not be prevented or detected. Accordingly,  management has determined that
this control deficiency constitutes a material weakness.

      (3)  the  completeness  and  accuracy  of  our  environmental  remediation
liability  reserves.  Specifically,  we  did  not  have  effective  controls  to
accurately  estimate or monitor for completeness our  environmental  remediation
liabilities  arising from  contractual  obligations or regulatory  requirements.
This  control  deficiency  resulted  in audit  adjustments  to the 2005 and 2004
annual  consolidated  financial  statements  and the  2005  unaudited  quarterly
consolidated financial statements.  Additionally,  this control deficiency could
result  in  a  material  misstatement  of  environmental  remediation  liability
reserves and environmental  remediation expenses that would result in a material
misstatement to annual or interim  consolidated  financial statements that would
not be prevented or detected.  Accordingly,  management has determined that this
control deficiency constitutes a material weakness.

      (4)  the  valuation  of  long-lived   assets  for   impairment   purposes.
Specifically,  we did not have  effective  controls to ensure the  accuracy  and
valuation  of an  impairment  charge taken in the second  quarter of 2004.  This
control  deficiency  resulted  in  a  restatement  of  our  unaudited  quarterly
condensed consolidated financial statements for the second and third quarters of
2004 and audit adjustments in the annual consolidated  financial  statements for
2004.  Additionally,   this  control  deficiency  could  result  in  a  material
misstatement of property,  plant and equipment and asset impairment charges that
would result in a material  misstatement  of the annual or interim  consolidated
financial  statements  that would not be  prevented  or  detected.  Accordingly,
management has determined  that this control  deficiency  constitutes a material
weakness.

      (5) the  accounting  for  derivative  instruments  and hedging  activities
related to precious metal inventory.  Specifically,  effective controls were not
designed and in place to ensure the appropriate documentation had been completed
in order to qualify for hedge  accounting  treatment with respect to futures and
forward contracts  specifically  purchased to mitigate the Company's exposure to
changes  in  the  value  of  precious  metal  inventory,  including  appropriate
identification  of the instruments,  assessment of effectiveness and maintenance
of   contemporaneous   documentation  in  accordance  with  generally   accepted
accounting  principles.  This control deficiency  resulted in the restatement of
the annual  consolidated  financial  statements  for the year ended December 31,
2003 and  prior  years,  the 2004  unaudited  quarterly  consolidated  financial
statements,  as well as audit adjustments in the annual  consolidated  financial
statements  for 2005 and 2004  and the  2005  unaudited  quarterly  consolidated
financial  statements.  Additionally,  this control deficiency could result in a
material  misstatement  of  inventory  and cost of  goods  sold as well as other
current  assets or accrued  liabilities  and other income  (expense)  that would
result  in a  material  misstatement  of  the  annual  or  interim  consolidated
financial  statements  that would not be  prevented  or  detected.  Accordingly,
management has determined  that this control  deficiency  constitutes a material
weakness.


                                       37


      (6) the  preparation  and  review of the  consolidated  statement  of cash
flows. Specifically, we did not maintain effective controls over the accuracy of
the classification of short-term borrowings used to fund purchases of short-term
investments  as cash flows from financing  activities,  as required by generally
accepted  accounting  principles.   This  control  deficiency  resulted  in  the
restatement of the annual consolidated  financial  statements for the year ended
December 31, 2003 and prior years.  Additionally,  this control deficiency could
result in a material  misstatement  of operating and  financing  cash flows that
would result in a material  misstatement  of the annual or interim  consolidated
financial  statements  that would not be  prevented  or  detected.  Accordingly,
management has determined  that this control  deficiency  constitutes a material
weakness.

PLANS FOR REMEDIATION

The Company has taken the following  actions to address the material  weaknesses
noted above.

   o  Engaged an independent third-party valuation firm in the second quarter of
      2005 to assist  management  in evaluating  the  impairment of goodwill and
      intangible asset accounts;
   o  Increased the Company's  accounting  and financial  resources by hiring an
      Assistant  Controller and a Treasurer and retaining a regional  accounting
      firm of certified  public  accountants to assist  financial  management in
      addressing various accounting matters;
   o  Increased  the level of review and  discussion on  significant  accounting
      matters, including goodwill valuation,  environmental issues, tax matters,
      cash flow  presentation and hedging and related  supporting  documentation
      with senior finance management;
   o  Consolidated corporate office functions;
   o  Improved  controls  regarding  timely  communication  of all significant
      events to management and the Board of Directors; and
   o  Enhanced  the monthly  financial  reporting to senior  management  and the
      Board.

Additional actions planned by management include:

   o  Hiring additional experienced  financial personnel;
   o  Updating the Company's  accounting  policies and procedures to ensure such
      accounting policies and procedures are complete and current;
   o  Considering  the  engagement  of an  additional  third  party  resource to
      support the internal accounting and financial personnel; and
   o  Reviewing and modifying the nature and scope of internal audit activities.

      Management will consider the design and operating  effectiveness  of these
actions and will make additional  changes it determines  appropriate.  We cannot
assure you that the measures we have taken,  or will take,  to  remediate  these
material  weaknesses  will  be  effective  or that  we  will  be  successful  in
implementing  them before  December 31, 2007 or December 31, 2008,  the dates on
which  the  Company  and its  independent  registered  public  accounting  firm,
respectively,  must first report on the  effectiveness  of our internal  control
over financial  reporting under the Section 404 provisions of the Sarbanes-Oxley
Act.

      Internal  control over disclosure  controls and procedures,  no matter how
well designed, has inherent limitations. Therefore, even those internal controls
determined to be effective can provide only reasonable assurance with respect to
financial  statement  preparation and presentation.  We will continue to improve
the design and  effectiveness  of our disclosure  controls and procedures to the
extent  necessary  in the future to provide  our senior  management  with timely
access to such material information, and to correct any deficiencies that we may
discover in the future.

PART II  OTHER INFORMATION

ITEM 1.     LEGAL PROCEEDINGS

      Please see "Legal  Proceedings"  from the Company's  Annual Report on Form
10-K for the year ended December 31, 2005.


                                       38


ITEM 1A.    RISK FACTORS

      Please see "Risk  Factors" from the  Company's  Annual Report on Form 10-K
for the year ended December 31, 2005.

ITEM 2.     CHANGES IN SECURITIES AND USE OF PROCEEDS

      None.

ITEM 3.     DEFAULTS ON SENIOR SECURITIES

      On March 7, 2005, WHX filed a voluntary petition  ("Bankruptcy Filing") to
reorganize under Chapter 11 of the United States Bankruptcy Code with the United
States  Bankruptcy  Court for the Southern  District of New York. The Bankruptcy
Filing created an event of default under the Indenture  governing  WHX's 10 1/2%
Senior  Notes (the "Senior  Notes") due April 15,  2005.  Under the terms of the
Senior Notes, as a result of the Bankruptcy  Filing, the entire unpaid principal
and accrued interest (and any other additional  amounts) became  immediately due
and payable  without any action on the part of the trustee or the note  holders.
The  principal  amount  outstanding  under the Senior Notes at March 7, 2005 was
approximately $92.8 million. Accrued interest to March 7, 2005 was approximately
$3.8 million.  As previously  described,  after  emerging from  bankruptcy,  the
Senior Notes were deemed cancelled and annulled.

      At March  7,  2005,  the date of the  Bankruptcy  Filing,  there  were 2.6
million shares of Series A Convertible Preferred Stock and 2.9 million shares of
Series B Convertible Preferred Stock outstanding.  Dividends on these shares are
cumulative and are payable quarterly in arrears, in an amount equal to $3.25 per
annum per share of Series A and $3.75 per annum per share of Series B.  Pursuant
to the terms of the  Supplemental  Indenture  to the  Company's  10 1/2 % Senior
Notes,  the Company was prohibited from payinG dividends on this Preferred Stock
until after October 31, 2002, at the earliest and  thereafter  only in the event
that the Company satisfied certain  conditions set forth in the Indenture.  Such
conditions were not satisfied as of March 7, 2005. At March 7, 2005 dividends in
arrears amounted to $86.1 million. As previously described,  after emerging from
bankruptcy,  all shares of  preferred  stock and accrued  dividends  were deemed
cancelled and annulled.

ITEM 6.     EXHIBITS

    * Exhibit 31.1 Certification of Principal Executive Officer pursuant to Rule
      13a-14(a) or 15d-14(a) of the Securities Exchange Act of 1934, as amended,
      as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

    * Exhibit 31.2 Certification of Principal Financial Officer pursuant to Rule
      13a-14(a) or 15d-14(a) of the Securities Exchange Act of 1934, as amended,
      as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

    * Exhibit 32.  Certification  of Principal  Executive  Officer and Principal
      Financial   Officer  pursuant  to  Rule  13a-14(b)  or  15d-14(b)  of  the
      Securities Act of 1934, as amended,  as adopted pursuant to Section 906 of
      the Sarbanes-Oxley Act of 2002.

    * Filed herewith


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                                   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.

                                    WHX CORPORATION

                                    /s/ Robert K. Hynes
                                    --------------------------------------------
                                    Robert K. Hynes
                                    Chief Financial Officer
                                    (Principal Accounting Officer)

                                    May 18, 2007


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