Aug. 4, 2010 (Business Wire) -- Hudson Technologies, Inc. (NASDAQ: HDSN), a leading distributor and reclaimer of refrigerants as well as a provider of proprietary on-site decontamination services for large comfort and process cooling systems, announced results for the second quarter and six months ended June 30, 2010.
Revenues for the three months ended June 30, 2010 increased 93% to $16,053,000 from $8,317,000 in the comparable 2009 period. Gross profit margins remained constant at 23% for the second quarter of 2010 when compared to the second quarter of 2009, but showed a sequential increase when compared to the 13% gross margins reported in the first quarter of 2010. Hudson reported net income of $1,327,000, or $0.06 per basic and diluted share, for the second quarter of 2010, compared to net income of $164,000, or $0.01 per basic and diluted share for the second quarter of 2009.
For the six months ended June 30, 2010 the Company reported revenues of $25,137,000, a 69% increase compared to revenues of $14,900,000 in the six months ended June 30, 2009. Gross profit margins remained essentially constant at 19% in the first half of 2010 when compared to 20% in the first half of 2009. Hudson achieved net income of $1,057,000 or $0.05 per basic and diluted share in the first six months of 2010, compared to a net loss of $111,000 or a loss of $0.01 per basic and diluted share in the first six months of 2009.
Kevin J. Zugibe, Chairman and Chief Executive Officer of Hudson Technologies commented, “We are very pleased to report continued upward momentum in our business throughout the second quarter, with a record high in revenues and in volume of refrigerant sold. Our performance this year has been favorably impacted by the warmer weather that arrived earlier this year when compared to prior years. We experienced increased volumes from both our existing customers and from new customers, resulting in significant gains in revenue and net income over last year. The 2010 results were achieved without a notable increase in R-22 refrigerant prices in a quarter over quarter comparison. Our inventory management through 2009 and early 2010 contributed to our improved margin performance during the second quarter when compared to the first quarter of this year and we expect a return to more historical gross margins next quarter.
“So far in 2010, we have not seen an appreciable price increase in the sale price of R-22 over last year, which we attribute primarily to a backlog in inventories resulting from the poor 2009 cooling season. We do not expect future pricing to be affected by these inventory backlogs and are optimistic that we will see further price increases in the future, which we expect will lend further support to our reclamation business. As refrigerant prices rise, so does the incentive for reclamation and we are well positioned to capitalize on increases in pricing through our established customer base, which enables us to profit not only from the sale of virgin refrigerants, but also from the reclamation and resale of used refrigerants. Based upon the current demand for refrigerants and potential price improvement in the future, we believe that, moving forward, we are on track to return to the gross margin levels we experienced from 2003 to 2008.
“As we have said for the past three quarters, we view last year as an anomaly, which temporarily interrupted a five-year trend of double digit revenue growth. In the first half of this year, we have seen growth in our customer base, and we believe that our results thus far in 2010 signal a return to the growth trend we achieved during the 2003 to 2008 time period. For 2010 we expect to exceed 2008 revenue levels with an increase in both customers served and in total volume of refrigerant sold. We also believe that our industry as a whole is beginning to return to its historical and more predictable seasonal pattern of inventory management. We believe that we will be able to capitalize on the anticipated growth in our industry and we will begin to utilize the approximately $5 million in net proceeds from our recent financing to help further advance our revenue and profitability growth.
“It is gratifying to have achieved improved results during the first half of 2010 and we believe these results are a reflection not only on our Company but on the resilience of our industry. As our industry begins to feel the effects of the shortage of R-22 refrigerants, we remain very optimistic that Hudson’s experience and existing infrastructure position us well to take advantage of upcoming opportunities, increasing our market share and profitability.”
CONFERENCE CALL INFORMATION
The Company will host a conference call to discuss the second quarter and six month results today, August 4, 2010 at 10:00 A.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 877-307-1372 approximately five minutes prior to the scheduled start time. International callers please dial 678-894-3936.
A replay of the webcast will be available until August 11, 2010 and may be accessed by dialing 800-642-1687 and international callers may dial 706-645-9291. Callers should use pass code 90534778.
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 Act of 1995
Statements contained herein, which are not historical facts constitute 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 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) | ||||||||||
| June 30, | December 31, | |||||||||
| 2010 | 2009 | |||||||||
| (unaudited) | ||||||||||
| Assets | ||||||||||
| Current assets: | ||||||||||
| Cash and cash equivalents | $ | 494 | $ | 299 | ||||||
| Trade accounts receivable - net of allowance for doubtful accounts of $236 and $229 | 8,977 | 1,594 | ||||||||
| Inventories | 12,995 | 16,410 | ||||||||
| Prepaid expenses and other current assets | 1,306 | 815 | ||||||||
| Total current assets | 23,772 | 19,118 | ||||||||
| Property, plant and equipment, less accumulated depreciation and amortization | 2,912 | 2,925 | ||||||||
| Other assets | 79 | 104 | ||||||||
| Deferred tax assets | 4,120 | 4,120 | ||||||||
| Intangible assets, less accumulated amortization | 68 | 78 | ||||||||
| Total Assets | $ | 30,951 | $ | 26,345 | ||||||
| Liabilities and Stockholders' Equity | ||||||||||
| Current liabilities: | ||||||||||
| Accounts payable and accrued expenses | $ | 8,761 | $ | 4,178 | ||||||
| Accrued payroll | 171 | 114 | ||||||||
| Short-term debt and current maturities of long-term debt | 7,706 | 5,457 | ||||||||
| Total current liabilities | 16,638 | 9,749 | ||||||||
| Long-term debt, less current maturities | 1,078 | 4,581 | ||||||||
| Total Liabilities | 17,716 | 14,330 | ||||||||
| 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 | -- | -- | ||||||||
| Common stock, $0.01 par value; shares authorized 50,000,000 | ||||||||||
| issued and outstanding 21,043,106 and 20,941,706 | 210 | 209 | ||||||||
| Additional paid-in capital | 37,772 | 37,609 | ||||||||
| Accumulated deficit | (24,747 | ) | (25,803 | ) | ||||||
| Total Stockholders' Equity | 13,235 | 12,015 | ||||||||
| Total Liabilities and Stockholders' Equity | $ | 30,951 | $ | 26,345 | ||||||
| Hudson Technologies, Inc. and subsidiaries | ||||||||||||||||||
| Consolidated Statements of Operations | ||||||||||||||||||
| (unaudited) | ||||||||||||||||||
| (Amounts in thousands, except for share and per share amounts) | ||||||||||||||||||
| Three month period | Six month period | |||||||||||||||||
| ended June 30, | ended June 30, | |||||||||||||||||
| 2010 | 2009 | 2010 | 2009 | |||||||||||||||
| Revenues | $ | 16,053 | $ | 8,317 | $ | 25,137 | $ | 14,900 | ||||||||||
| Cost of sales | 12,356 | 6,397 | 20,263 | 11,856 | ||||||||||||||
| Gross Profit | 3,697 | 1,920 | 4,874 | 3,044 | ||||||||||||||
| Operating expenses: | ||||||||||||||||||
| Selling and marketing | 499 | 499 | 1,004 | 1,000 | ||||||||||||||
| General and administrative | 757 | 728 | 1,592 | 1,454 | ||||||||||||||
| Total operating expenses | 1,256 | 1,227 | 2,596 | 2,454 | ||||||||||||||
| Operating income | 2,441 | 693 | 2,278 | 590 | ||||||||||||||
| Other income (expense): | ||||||||||||||||||
| Interest expense | (301 | ) | (429 | ) | (573 | ) | (770 | ) | ||||||||||
| Total other income (expense) | (301 | ) | (429 | ) | (573 | ) | (770 | ) | ||||||||||
| Income (loss) before income taxes | 2,140 | 264 | 1,705 | (180 | ) | |||||||||||||
| Income tax provision (benefit) | 813 | 100 | 648 | (69 | ) | |||||||||||||
| Net income (loss) | $ | 1,327 | $ | 164 | $ | 1,057 | ($111 | ) | ||||||||||
| Net income (loss) per common share – Basic | $ | 0.06 | $ | 0.01 | $ | 0.05 | ($0.01 | ) | ||||||||||
| Net income (loss) per common share - Diluted | $ | 0.06 | $ | 0.01 | $ | 0.05 | ($0.01 | ) | ||||||||||
| Weighted average number of shares outstanding – Basic | 20,986,339 | 19,429,533 | 20,966,939 | 19,426,200 | ||||||||||||||
| Weighted average number of shares outstanding – Diluted | 22,573,109 | 20,218,083 | 22,553,709 | 19,426,200 | ||||||||||||||
