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Hudson Technologies (HDSN) Reports $0.10 Earnings Per Diluted Share for First Quarter 2012

Hudson Technologies, Inc. (NASDAQ: HDSN), announced results for the first quarter ended March 31, 2012.

Revenues for the three months ended March 31, 2012 increased more than 7% to $14,854,000 from $13,818,000 in the comparable 2011 period. Hudson reported a gross profit margin of 40% for the first quarter of 2012 compared to 27% in the first quarter last year. The Company also reported net income of $2,509,000, or $0.11 per basic share and $0.10 per diluted share for the first quarter of 2012, compared to net income of $1,088,000, or $0.05 per basic share and $0.04 per diluted share for the first quarter of 2011. Income tax expense of $1,538,000 and $667,000 for the first quarter of 2012 and for the first quarter of 2011, respectively, is largely a non-cash item as a result of the Company’s deferred tax asset.

Kevin J. Zugibe, Chairman and Chief Executive Officer of Hudson Technologies commented, “During the first quarter of 2012 the industry saw, and continues to see, a dramatic increase in the price of R-22 which favorably impacted our first quarter performance. The increased sales price of R-22 followed the Environmental Protection Agency’s (EPA) issuance in January 2012 of ‘No Action Assurance’ letters to producers and importers of R-22 that, until the EPA’s issuance of a final rule, limits the amount of R-22 that can be manufactured and/or imported in 2012 by approximately 45% from the amount allowed in 2011. We believe a final rule from the EPA establishing the actual production and consumption limits for 2012, 2013 and 2014 will be issued later this year. Despite a slight decline in the volume of pounds sold during the first quarter, which is a result of our inventory management as we move through the current year, increased R-22 pricing contributed to our ability to achieve record revenues and gross margins of 40%.

“As we’ve stated previously, we believe that increases in the price of R-22 support the growth of reclamation by providing contractors with the needed economic incentive to recover used, or ‘dirty’ gas. As R-22 increases in value and it becomes more economically attractive for contractors to recover and return used R-22, we believe Hudson will acquire an increased number of pounds of refrigerant that we can reclaim to virgin specifications and then resell in the marketplace to help fill the supply gap created by the EPA as virgin R-22 production phases out. It’s important to note that reclamation is largely a seasonal activity that commences in late spring and typically continues into early winter, slightly trailing the cooling season. We have always believed that the missing catalyst for increased reclamation was the price of R-22 so, although we have not yet entered the traditional reclamation season, the recent and dramatic increase in the price of R-22 could possibly drive significant growth in reclamation beginning this summer.

“In 2011, despite a strong first quarter, we saw declines in refrigerant prices and reduced profitability during the balance of the 2011 cooling season. In 2012, we again had a strong first quarter, but unlike last year, we are expecting improvement in the profitability of the Company for the remainder of the 2012 cooling season. We remain confident that we are well positioned to take advantage of the industry shift currently underway and we’ve been carefully managing our inventory to effectively capitalize on the ongoing opportunities resulting from the increase in R-22 pricing. Likewise, we recognize the importance of ensuring that our broad product and service offerings provide the right solution in the right place at the right time to meet our customers’ needs and we are focused on executing on this strategy to drive sustainable revenue and earnings growth.”


The Company will host a conference call to discuss the first quarter results today, May 2, 2012 at 10:00 A.M. Eastern Time.

To access the live webcast log onto the Hudson Technologies website at 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 webcast will be available until April 6, 2012 and may be accessed by dialing (877) 660-6853 and international callers may dial (201) 612-7415. Callers should use account number 286 and pass code 390085.

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

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 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 venture which include the ability of the parties to perform their obligations under the joint venture agreement, 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 venture may seek to conduct business, 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 Balance Sheets

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

3/31/2012 12/31/2011
Current assets:
Cash and cash equivalents $ 148 $ 3,958
Trade accounts receivable – net of allowance for doubtful
accounts of $201 and $200 8,884 2,453
Inventories 16,624 17,734
Prepaid expenses and other current assets 566 611
Deferred tax assets-current 1,046 0
Total current assets 27,268 24,756
Property, plant and equipment, less accumulated depreciation and amortization 3,482 3,441
Other assets 116 79
Deferred tax assets 502 3,086
Intangible assets, less accumulated amortization 91 89
Total Assets $ 31,459 $ 31,451
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable and accrued expenses $ 4,524 $ 5,227
Accrued payroll 411 703
Short-term debt and current maturities of long-term debt 4,830 6,361
Total current liabilities 9,765 12,291
Long-term debt, less current maturities 145 121
Total Liabilities 9,910 12,412
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;
23,790,455 and 23,783,106 issued and outstanding 238 238
Additional paid-in capital 42,870 42,869
Accumulated deficit (21,559 ) (24,068 )
Total Stockholders’ Equity 21,549 19,039
Total Liabilities and Stockholders’ Equity $ 31,459 $ 31,451
Hudson Technologies, Inc. and subsidiaries

Consolidated Income Statements


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

Three month period
ended March 31,
2012 2011
Revenues $14,854 $13,818
Cost of sales 8,886 10,116
Gross Profit 5,968 3,702
Operating expenses:
Selling and marketing 681 642
General and administrative 1,069 1,070
Total operating expenses 1,750 1,712
Operating income 4,218 1,990
Other income (expense):
Interest expense (171) (243)
Interest income 0 8
Total other income (expense) (171) (235)
Income before income taxes 4,047 1,755
Income tax expense 1,538 667
Net income $2,509 $1,088
Net income per common share – Basic $0.11 $0.05
Net income per common share – Diluted $0.10 $0.04
Weighted average number of shares
outstanding – Basic 23,785,556 23,780,606
Weighted average number of shares
outstanding – Diluted 25,848,956 25,168,947
Wednesday, May 2nd, 2012 Uncategorized