Hudson Technologies REPORTS
FIrst QUarter Results
Revenues Decrease With Shift in Customer Buying Pattern
pearl river, ny – May
7, 2009 –
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 first quarter ended March 31, 2009.
Revenues for the three months ended March 31, 2009 decreased 42% to
$6,583,000 from $11,366,000 in the comparable 2008 period. Gross
profit margins decreased to 17% for the first quarter of 2009 compared
to 32% in the first quarter of 2008. Hudson reported a net loss of
$275,000 or a loss of $0.01 per basic and diluted common share for the
quarter ended March 31, 2009 compared to net income of $1,751,000 or
$0.09 per basic and diluted common share for the quarter ended March
31, 2008.
Kevin J. Zugibe, Chairman and Chief Executive Officer of Hudson
Technologies commented, “We
are obviously disappointed with our first quarter financial results.
From 2004 through the end of 2008, Hudson
has demonstrated steady, double digit revenue growth and dramatic
improvement in earnings, culminating in more than $33 million in
revenues and more than $6.9 million in net profit in 2008. As is
evident from our first quarter 2009 results, our five year growth
trend has been, we believe, temporarily interrupted by unprecedented
market conditions resulting from the severe economic downturn that has
impacted nearly every aspect of our nation’s economy.
“Traditionally, the fourth quarter is our slowest quarter given the
seasonality of the refrigerants business. Conversely, our first and
second quarters are traditionally the strongest, during which most of
our refrigerant sales are made each year as our customers typically
increase their inventories and buy refrigerant in preparation for the
warmer months. This year, because of the economic downturn, we believe
that there has been a shift in the normal buying pattern. Customers
have deferred their pre-season purchases to lower their inventory to
below normal levels, a phenomenon also noted by other leaders in our
industry in public statements to their investors.
“We have been and remain in close contact with our customers and we do
not believe that this unprecedented shift in our customers’ buying
patterns reflects a reduction in the overall annual demand for
refrigerants or that our customers are sourcing product from other
suppliers. We are cautiously optimistic that we will see pent up
demand at the end of the second quarter as we move into the warmer
summer months when demand for air conditioning and refrigeration is at
its peak. If this occurs we could see stronger third quarter revenues
this year when compared to prior years. Fortunately, we are well
positioned to meet any pent up demand and to accommodate our
customers’ needs, and are therefore in a position to generate the
revenues that we believe have shifted from the first quarter.”
Mr. Zugibe continued, “The current economic conditions will not impact
the scope or the pace of the federally mandated phase out of the
production of new (virgin) HCFC refrigerants, which will begin in
January 2010, a mere seven months from now. This phase out is a
catalytic event for Hudson, with the EPA having already proposed draft
regulations issued last December that would limit the total amount of
HCFCs that can be produced and imported to meet only 80% of the
estimated U.S. demand. In proposing these regulations, the EPA
expects that 20% of the demand will be met by reclaimed or recycled
refrigerant, which amounts to a more than 300% increase in the demand
for reclamation from current levels. As an industry leader with
proven infrastructure and distillation capabilities, we expect to
benefit from this industry shift.
“In addition to the mandated HCFC phase out, we believe there are
significant opportunities for our business related to climate
legislation currently under consideration in Washington. A climate
change bill, which is expected to establish a cap & trade system and
will likely call for the phase down of the next generation of
refrigerants, known as Hydrofluorocarbons (HFCs), could provide
further growth opportunities for our reclamation business.
Additionally, our optimization services, which deliver ways for system
owners to optimize the performance and energy efficiency of their air
conditioning and refrigeration systems, provide a method for our
customers to monetize their CO2 reductions resulting from energy
savings in the form of carbon credits.
Mr. Zugibe concluded, “We are confident in our ability to adapt to the
challenges presented by the current economic climate, and we remain
committed to strategically positioning the Company to take full
advantage of the significant opportunities we believe will result from
the upcoming HCFC refrigerant phase out and proposed climate change
legislation.”
CONFERENCE CALL INFORMATION
The Company will host a conference call to discuss the fourth quarter
and year end results on May 7, 2009 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”. The webcast
can also be accessed at
www.InvestorCalendar.com .
To participate
in the call by phone, dial 877-407-0778 approximately five minutes
prior to the scheduled start time. International callers please dial
201-689-8565.
A replay of the
webcast can be accessed by visiting the Investor Relations section of
the Hudson Technologies website.
A
replay of the teleconference will be available until May 14, 2009 and
may be accessed domestically by dialing 877-660-6853 and international
callers may dial 201-612-7415. Callers should use account number 286
and pass code 321421.
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.
|
Investor Relations Contact:
John Nesbett/Jennifer Belodeau
Institutional Marketing Services (IMS)
(203) 972-9200
jnesbett@institutionalms.com
|
Company Contact:
Brian F. Coleman, President & COO
Hudson Technologies, Inc.
(845) 735-6000
bcoleman@hudsontech.com |
Hudson Technologies, Inc. and
subsidiaries
Consolidated Statements of Operations
(unaudited)
(Amounts in thousands, except for share
and per share amounts)
|
|
Three month period
ended March 31, |
|
|
2009 |
2008 |
|
|
|
|
|
Revenues |
$6,583 |
$11,366 |
|
Cost of sales |
5,459 |
7,770 |
|
Gross Profit |
1,124 |
3,596 |
|
|
|
|
|
Operating expenses: |
|
|
|
|
Selling and marketing |
501 |
551 |
|
|
General and
administrative |
726 |
989 |
|
|
Total operating expenses |
1,227 |
1,540 |
|
|
|
|
|
|
|
|
|
|
Operating income (loss) |
(103) |
2,056 |
|
|
|
|
|
Other income (expense):
|
|
|
|
|
Interest expense |
(341) |
(254) |
|
|
Interest income |
-- |
1 |
|
|
Total other income (expense) |
(341) |
(253) |
|
|
|
|
|
Income (loss) before income taxes
|
(444) |
1,803 |
|
|
|
|
|
Income tax provision (benefit) |
(169) |
52 |
|
|
|
|
|
Net income (loss) |
($275) |
$1,751 |
|
|
===== |
===== |
|
Net income (loss) per common share
– Basic and Diluted |
($0.01) |
$ 0.09 |
|
|
===== |
===== |
|
Weighted average number of shares |
|
|
|
|
outstanding – Basic |
19,424,950 |
19,072,264 |
|
|
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========= |
|
Weighted average number of shares |
|
|
|
|
outstanding – Diluted |
19,424,950 |
19,521,362 |
|
|
|
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