Hudson Technologies, Inc. (NASDAQ: HDSN) announced results for the
first quarter ended March 31, 2020.
For the quarter ended March 31, 2020, Hudson
reported revenues of $36.4 million, a 5% increase compared to $34.7
million in the comparable 2019 period, primarily due to an increase
in the volume of refrigerants sold. Gross margin was 23% for
the first quarter of 2020 compared to 20% for the first quarter of
2019. The Company reported operating income of $0.4 million
for the first quarter of 2020 compared to operating income of $0.2
million for the first quarter of 2019. Net loss for the first
quarter of 2020 was $2.9 million, or ($0.07) per basic and diluted
share, compared to a net loss of $4.0 million or ($0.09) per basic
and diluted share in the first quarter of 2019.
Kevin J. Zugibe, Chairman and Chief Executive
Officer of Hudson Technologies commented, “First let me say that
the novel coronavirus disease, COVID-19, has had a dramatic impact
on every person, business and industry, and Hudson is no
exception. However, Hudson operates in a ‘critical
infrastructure industry’ and is an essential business as
defined by the U.S. government. We have kept our plants
operating and have been effectively running our operations, while
following all state and federal guidelines to keep our employees
safe and healthy. Our priorities throughout this pandemic
have been, and will continue to be, to ensure the health and safety
of our employees; to keep our products in supply and to maintain
the quality and safety of our products; to best serve our customers
across all channels as they adapt to the crisis; and, to position
ourselves to emerge strong when the crisis ends.
“As we look back on the first quarter, we saw an
increase in volume over the same period last year, building on the
increased volume we saw in 2019, and we are seeing some
strengthening in the pricing of R-22. We are a few weeks away from
the prime selling season so it is still early in the 2020 season to
know how pricing will develop, and it also remains to be seen as to
what effect the weather and the economic impact of COVID-19 will
have on the price and demand for refrigerants. Additionally,
during the first quarter, we improved our gross margins in 2020
over 2019 and believe we have the opportunity to further drive
improved margins in 2020 as we replace higher priced inventory with
lower priced product. We believe that customer inventories
are low and, with the elimination of R-22 production and
importation in 2020, we expect to see a tightening in the supply of
virgin R-22. Finally, the Company’s financial position and
liquidity remain strong, with total liquidity at March 31, 2020 of
approximately $27 million, which includes cash and revolver
availability.
“As we proceed through 2020, we are concerned
that the economic factors resulting from the various governmental
restrictions that have been put in place could have a negative
impact on the demand for refrigerants. We continue to focus
on implementing various strategies to grow our leadership position
in the refrigerant industry, and on leveraging our strong
reclamation abilities and our presence at key points in the supply
chain.”
Conference Call Information
The Company will host a conference call and
webcast to discuss the first quarter results today, May 6, 2020 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)
407-9500 approximately five minutes prior to the scheduled start
time. International callers please dial (862) 298-0850.
A replay of the teleconference will be available
until June 5, 2020 and may be accessed by dialing (877) 481-4010.
International callers may dial (919) 882-2331. Callers should
use conference ID: 34600.
About Hudson Technologies
Hudson Technologies, Inc. is a leading provider
of innovative and sustainable solutions for optimizing performance
and enhancing reliability of commercial and industrial chiller
plants and refrigeration systems. Hudson's proprietary
RefrigerantSide® Services increase operating efficiency, provide
energy and cost savings, reduce greenhouse gas emissions and the
plant’s carbon footprint while enhancing system life and
reliability of operations at the same time. RefrigerantSide®
Services can be performed at a customer's site as an integral part
of an effective scheduled maintenance program or in response to
emergencies. Hudson also offers SMARTenergy OPS®, which is a
cloud-based Managed Software as a Service for continuous
monitoring, Fault Detection and Diagnostics and real-time
optimization of chilled water plants. In addition, the Company
sells refrigerants and provides traditional reclamation services
for commercial and industrial air conditioning and refrigeration
uses. 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. These
include statements regarding management’s intentions, plans,
beliefs, expectations or forecasts for the future including,
without limitation, Hudson’s expectations with respect to the
benefits, costs and other anticipated financial impacts of the ARI
transaction; future financial and operating results of the Company;
the Company’s ability to remain in compliance with the
financial covenants in its loan agreements; and the Company’s
plans, objectives, expectations and intentions with respect to
future operations and services. 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 demand and price 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 that 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, 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 Company may
seek to conduct business, the Company’s ability to successfully
integrate any assets it acquires from third parties into its
operations, the impact of the current COVID-19 pandemic, and other
risks detailed in the Company's 10-K for the year ended December
31, 2019 and other subsequent filings 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.
Company Contact:Brian F. Coleman, President
& COOHudson Technologies, Inc.(845)
735-6000bcoleman@hudsontech.com
Hudson Technologies, Inc. and
SubsidiariesConsolidated Balance
Sheets(unaudited)(Amounts in thousands,
except for share and par value amounts)
|
|
March 31, |
|
|
December 31, |
|
|
|
2020 |
|
|
2019 |
|
|
|
(unaudited) |
|
|
|
|
|
Assets |
|
|
|
|
|
|
|
|
Current
assets: |
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
6,251 |
|
|
$ |
2,600 |
|
Trade accounts receivable – net |
|
|
15,454 |
|
|
|
8,061 |
|
Inventories – net |
|
|
58,288 |
|
|
|
59,238 |
|
Prepaid expenses and other current assets |
|
|
4,231 |
|
|
|
4,525 |
|
Total current
assets |
|
|
84,224 |
|
|
|
74,424 |
|
|
|
|
|
|
|
|
|
|
Property, plant and equipment,
less accumulated depreciation |
|
|
22,784 |
|
|
|
23,674 |
|
Goodwill |
|
|
47,803 |
|
|
|
47,803 |
|
Intangible assets, less
accumulated amortization |
|
|
25,296 |
|
|
|
26,012 |
|
Right of use asset |
|
|
7,573 |
|
|
|
8,048 |
|
Other assets |
|
|
49 |
|
|
|
192 |
|
Total
Assets |
|
$ |
187,729 |
|
|
$ |
180,153 |
|
|
|
|
|
|
|
|
|
|
Liabilities and
Stockholders’ Equity |
|
|
|
|
|
|
|
|
Current
liabilities: |
|
|
|
|
|
|
|
|
Trade accounts payable |
|
$ |
11,513 |
|
|
$ |
10,274 |
|
Accrued expenses and other current liabilities |
|
|
20,126 |
|
|
|
18,120 |
|
Accrued payroll |
|
|
785 |
|
|
|
724 |
|
Short-term debt |
|
|
22,000 |
|
|
|
14,000 |
|
Current maturities of long-term debt |
|
|
3,757 |
|
|
|
3,008 |
|
Total current
liabilities |
|
|
58,181 |
|
|
|
46,126 |
|
Deferred tax liability |
|
|
1,180 |
|
|
|
1,192 |
|
Long-term lease liabilities |
|
|
5,143 |
|
|
|
5,742 |
|
Long-term debt, less current maturities |
|
|
80,874 |
|
|
|
81,982 |
|
Total
Liabilities |
|
|
145,378 |
|
|
|
135,042 |
|
|
|
|
|
|
|
|
|
|
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 |
|
|
— |
|
|
|
— |
|
Common stock, $0.01 par value; shares authorized 100,000,000;
issued and outstanding 42,628,560 at March 31, 2020
and December 31, 2019 |
|
|
426 |
|
|
|
426 |
|
Additional paid-in capital |
|
|
117,682 |
|
|
|
117,557 |
|
Accumulated deficit |
|
|
(75,757 |
) |
|
|
(72,872 |
) |
Total Stockholders’
Equity |
|
|
42,351 |
|
|
|
45,111 |
|
|
|
|
|
|
|
|
|
|
Total Liabilities and
Stockholders’ Equity |
|
$ |
187,729 |
|
|
$ |
180,153 |
|
|
|
|
|
|
|
|
|
|
Hudson Technologies, Inc. and
SubsidiariesConsolidated Statements of
Operations(unaudited)(Amounts in
thousands, except for share and per share amounts)
|
|
Three-month period ended March 31, |
|
|
|
2020 |
|
|
2019 |
|
|
|
|
|
|
|
|
Revenues |
|
$ |
36,350 |
|
|
$ |
34,664 |
|
Cost of sales |
|
|
28,003 |
|
|
|
27,679 |
|
Gross profit |
|
|
8,347 |
|
|
|
6,985 |
|
|
|
|
|
|
|
|
|
|
Operating expenses: |
|
|
|
|
|
|
|
|
Selling, general and administrative |
|
|
7,265 |
|
|
|
6,024 |
|
Amortization |
|
|
716 |
|
|
|
721 |
|
Total operating expenses |
|
|
7,981 |
|
|
|
6,745 |
|
|
|
|
|
|
|
|
|
|
Operating income |
|
|
366 |
|
|
|
240 |
|
|
|
|
|
|
|
|
|
|
Interest expense |
|
|
(3,311 |
) |
|
|
(4,207 |
) |
|
|
|
|
|
|
|
|
|
Loss before income taxes |
|
|
(2,945 |
) |
|
|
(3,967 |
) |
|
|
|
|
|
|
|
|
|
Income tax (benefit) |
|
|
(60 |
) |
|
|
72 |
|
|
|
|
|
|
|
|
|
|
Net loss |
|
$ |
(2,885 |
) |
|
$ |
(4,039 |
) |
|
|
|
|
|
|
|
|
|
Net loss per common share – Basic |
|
$ |
(0.07 |
) |
|
$ |
(0.09 |
) |
Net loss per common share – Diluted |
|
$ |
(0.07 |
) |
|
$ |
(0.09 |
) |
Weighted average number of shares outstanding – Basic |
|
|
42,628,560 |
|
|
|
42,602,431 |
|
Weighted average number of
shares outstanding – Diluted |
|
|
42,628,560 |
|
|
|
42,602,431 |
|
|
|
|
|
|
|
|
|
|
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