Hudson Technologies Reports Second Quarter 2013 Results

Business Wire

PEARL RIVER, N.Y.--(BUSINESS WIRE)--

Hudson Technologies, Inc. (HDSN) announced results for the quarter ended June 30, 2013.

Revenues for the three months ended June 30, 2013 decreased 29% to $15,768,000 from $22,251,000 in the comparable 2012 period. Net income for the second quarter was $334,000, or $0.01 per basic and diluted share, compared to net income of $5,135,000, or $0.22 per basic share and $0.20 per diluted share for the second quarter of 2012.

For the six months ended June 30, 2013, revenues increased 4% to $38,645,000 as compared to revenues of $37,105,000 in the first six months of 2012. The Company reported a net income of $4,803,000, or $0.20 per basic share and $0.18 per diluted share in the first six months of 2013, compared to net income of $7,644,000 or $0.32 per basic share and $0.29 per diluted share in the first six months of 2012.

Kevin J. Zugibe, Chairman and Chief Executive Officer of Hudson Technologies commented, “As we previously announced, our second quarter performance fell short of our expectations. The EPA’s final rule, issued April 3, permitted higher than expected virgin R-22 allowances for 2013 and 2014, heightening what is clearly an oversupply in the market. In addition, the demand for R-22 in the quarter was negatively impacted by very cool spring temperatures. As a result, we saw prices of R-22 soften by approximately 30% in the second quarter. We have seen a further reduction by approximately 10% during July, primarily related to the oversupply situation resulting from the EPA’s April rule.

“We are very disappointed in the EPA’s recent ruling from both an economic and environmental standpoint. Under the Montreal Protocol, virgin R-22 production must be reduced to zero by 2020 with reclaimed gas filling the anticipated supply gap. In furtherance of that requirement, the EPA is currently drafting rules to establish R-22 production allowances for the period 2015 through 2019. We are expanding our efforts to educate the EPA about the adverse environmental and market impact that will result from continued production of R-22, and to demonstrate the need to aggressively reduce production of R-22 for the 2015 to 2019 period. We believe the EPA should have greater urgency with regard to limiting virgin supply levels of R-22, to both lower the global warming potential of additional virgin R-22 and support an orderly and efficient market for the industry and consumers.”

CONFERENCE CALL INFORMATION

The Company will host a conference call to discuss the first quarter results today, July 30, 2013 at 5:00 P.M. Eastern Time.

To access the live webcast, log onto the Hudson Technologies website at www.hudsontech.com, and click on “Investor Relations.”

To participate in the call by phone, dial (877) 407-9205 approximately five minutes prior to the scheduled start time. International callers please dial (201) 689-8054.

A replay of the teleconference will be available until August 30, 2013 and may be accessed by dialing (877) 660-6853 and international callers may dial (201) 612-7415. Callers should use conference ID: 418182. A transcript of the call will be available on the Hudson Technologies website approximately 24 hours after its completion.

About Hudson Technologies

Hudson Technologies, Inc. is a leading provider of innovative solutions to recurring problems within the refrigeration industry. Hudson's proprietary RefrigerantSide® Services increase operating efficiency and energy savings, and remove moisture, oils and other contaminants frequently found in the refrigeration circuits of large comfort cooling and process refrigeration systems. Performed at a customer's site as an integral part of an effective scheduled maintenance program or in response to emergencies, RefrigerantSide® Services offer significant savings to customers due to their ability to be completed rapidly and at higher purity levels, and can be utilized while the customer's system continues to operate. In addition, the Company sells refrigerants and provides traditional reclamation services to the commercial and industrial air conditioning and refrigeration markets. For further information on Hudson, please visit the Company's web site at www.hudsontech.com.

Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995

Statements contained herein which are not historical facts constitute forward-looking statements. Such forward-looking statements involve a number of known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Such factors include, but are not limited to, changes in the laws and regulations affecting the industry, changes in the markets for refrigerants (including unfavorable market conditions adversely affecting the demand for, and the price of, refrigerants), the Company's ability to source refrigerants, regulatory and economic factors, seasonality, competition, litigation, the nature of supplier or customer arrangements which become available to the Company in the future, adverse weather conditions, possible technological obsolescence of existing products and services, possible reduction in the carrying value of long-lived assets, estimates of the useful life of its assets, potential environmental liability, customer concentration, the ability to obtain financing, risks associated with the Company’s joint ventures which include the ability of the parties to perform their obligations under the joint venture agreements, any delays or interruptions in bringing products and services to market, the timely availability of any requisite permits and authorizations from governmental entities and third parties as well as factors relating to doing business outside the United States, including changes in the laws, regulations, policies, and political, financial and economic conditions, including inflation, interest and currency exchange rates, of countries in which the joint ventures may seek to conduct business, the Company’s ability to successfully integrate any assets it acquires from third parties into its operations, and other risks detailed in the Company's periodic reports filed with the Securities and Exchange Commission. The words "believe," "expect," "anticipate," "may," "plan," "should" and similar expressions identify forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date the statement was made.

Hudson Technologies, Inc. and Subsidiaries

Consolidated Income Statements

(unaudited)

(Amounts in thousands, except for share and per share amounts)

 
   

Three month period

   

Six month period

ended June 30,

ended June 30,

2013

 

2012

2013

 

2012

 
Revenues $ 15,768 $ 22,251 $ 38,645 $ 37,105
Cost of sales   13,220     12,014     26,935     20,900  
Gross Profit   2,548     10,237     11,710     16,205  
Operating expenses:
Selling and marketing 818 673 1,641 1,354
General and administrative   956     1,095     1,890     2,164  
Total operating expenses   1,774     1,768     3,531     3,518  
Operating income 774 8,469 8,179 12,687
Other income (expense):
Interest expense (243 ) (187 ) (440 ) (358 )
Interest income   0     1     0     1  
Total other income (expense)   (243 )   (186 )   (440 )   (357 )
Income before income taxes 531 8,283 7,739 12,330
 
Income tax expense   197     3,148     2,936     4,686  
Net income $ 334   $ 5,135   $ 4,803   $ 7,644  
Net income per common share – Basic $ 0.01   $ 0.22   $ 0.20   $ 0.32  
Net income per common share - Diluted $ 0.01   $ 0.20   $ 0.18   $ 0.29  

Weighted average number of shares outstanding – Basic

  24,891,115     23,841,996     24,605,541     23,813,776  

Weighted average number of shares outstanding - Diluted

  26,859,009     26,177,960     26,670,232     26,149,740  
 

Hudson Technologies, Inc. and subsidiaries

Consolidated Balance Sheets

(Amounts in thousands, except for share and par value amounts)

 
   

June 30,

   

December 31,

2013

2012

(unaudited)

Assets

Current assets:
Cash and cash equivalents $ 2,374 $ 3,991

Trade accounts receivable - net of allowance for doubtful accounts of $250 and $227

11,866 1,956
Inventories 51,298 40,167

Prepaid expenses and other current assets

2,991

676

Deferred tax asset

 

234

   

234

 
Total current assets 68,763 47,024
Property, plant and equipment, less accumulated depreciation and amortization 4,903 4,765
Other assets 291 341
Deferred tax asset 3,391 3,888
Investments in affiliates 1,165 1,138
Intangible assets, less accumulated amortization   62     76  
Total Assets $ 78,575   $ 57,232  
 

Liabilities and Stockholders' Equity

Current liabilities:
Accounts payable and accrued expenses $ 9,117 $ 6,219
Accrued payroll

Income taxes payable

280

1,237

661

0

Short-term debt and current maturities of long-term debt   24,475     12,736  
Total current liabilities 35,109 19,616
Long-term debt, less current maturities   4,824     4,920  
Total Liabilities   39,933     24,536  
Commitments and contingencies
Stockholders' equity:
Preferred stock shares authorized 5,000,000;

Series A convertible preferred stock, $0.01 par value ($100 liquidation preference value); shares authorized 150,000; none issued or outstanding

0 0

Common stock, $0.01 par value; shares authorized 50,000,000; 25,070,386 and 24,124,625 issued and outstanding

251 241
Additional paid-in capital 44,856 43,722
Accumulated deficit   (6,465 )   (11,267 )
Total Stockholders' Equity   38,642     32,696  
Total Liabilities and Stockholders' Equity $ 78,575   $ 57,232  

Contact:
Investor Relations:
Institutional Marketing Services (IMS)
John Nesbett/Jennifer Belodeau, 203-972-9200
jnesbett@institutionalms.com
or
Company:
Hudson Technologies, Inc.
Brian F. Coleman, 845-735-6000
President & COO
bcoleman@hudsontech.com
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