Revenues increase 28% to $11.3 million, highest quarterly sales in Company history

PEARL RIVER, N.Y. - August 2, 2007 - Hudson Technologies, Inc. (NASDAQ: HDSN), a leading refrigerant services company specializing in proprietary on-site decontamination services for large comfort and process cooling systems, today announced results for the second quarter ended June 30, 2007.  

Revenues for the second quarter of 2007 were $11,307,000, an increase of $2,504,000 or 28% from the $8,803,000 reported during the comparable 2006 period. Revenues for the six-month period ended June 30, 2007 were $19,424,000, an increase of $3,715,000 or 24% from the $15,709,000 reported during the comparable 2006 period.

As a result of the previously announced stock purchase from the Fleming Funds, the Company incurred a $4,338,000 non-recurring, non-cash charge to compensation expense, which reduced its reported operating income and net income by such amount. Therefore, as a result of this non-recurring, non-cash charge, the Company reported a net loss for the second quarter of $1,615,000, compared to $1,297,000 net income reported during the second quarter 2006.  The net loss for the six-month period ended June 30, 2007 of $1,332,000, which also gives effect to the $4,338,000 non-recurring, non-cash charge, compares to $1,544,000 net income reported during the comparable 2006 period.  The Company also recognized in the second quarter an income tax benefit of $1,254,000 associated with its deferred tax asset.  Without the non-recurring, non-cash charge of $4,338,000, the Company would have reported an increase in operating income and net income for the three and six months ended June 30, 2007 over the comparable 2006 periods.      

Comments by Kevin J. Zugibe, chairman and chief executive officer, Hudson Technologies:

"Operationally, the second quarter of 2007 was one of the Company's strongest quarters ever. Total revenues in the second quarter of 2007 exceeded $11 million, representing the highest quarterly revenues in our history.  Refrigerant sales in the second quarter of 2007 increased by more than $2,500,000 over the 2006 period, marking three years of double digit revenue growth, which we attribute largely to our efforts to expand our sales capability. RefrigerantSide® Services revenues were just slightly lower than last year's second quarter due to a slight reduction in the number of jobs completed.

"The second quarter of 2007 was not only a strong sales quarter, but also a quarter in which we took significant steps to return value to Hudson shareholders. As previously reported, on June 28, 2007, Fleming U.S. Discovery Fund III, L.P. and Fleming U.S. Offshore Discovery Fund III, L.P. ("Fleming Funds") sold 14,911,600 shares of Hudson's common stock in a series of transactions involving the Company and certain members of the Company's management.  Hudson purchased and retired 5,680,800 of those shares and certain members of the Company's management team in separate private transactions purchased 9,230,800 of those shares.  As a consequence of the sale by the Fleming Funds to the management team of 9,230,800 shares at a purchase price below the then current market price, the Company was required to record non-cash compensation expense of $4,338,000 and a corresponding increase to additional paid-in capital.  The Company's net worth was unaffected by this non-recurring, non-cash charge. As a result of these transactions, and after the Company completes its previously announced additional purchase of 1,167,400 shares, the Company will have reduced the number of outstanding shares by more than 26%.

"Certain members of Hudson's management team in the aggregate have personally invested approximately $6,000,000 to purchase 9,230,800 shares of unregistered common stock in the Company from the Fleming Funds. Management did not receive registration rights for these unregistered shares, which, under current regulations are, among other things, restricted from public sale for a minimum of one year from the date of purchase. These transactions, involving the significant personal investment made by our management, reflect the management team's confidence in the future of Hudson Technologies.

"Momentum continues to build as we execute on our vision for continued growth with an expanded sales capability, differentiated offerings and an aggressive share buyback to return value to our shareholders."

Conference Call Information

The Company will host a conference call to discuss the second-quarter 2007 results and additional matters on August 2, 2007 at 1:00 P.M. Eastern.

To listen to the conference call, dial 866-296-6505. Callers should please call at least ten minutes prior to the scheduled start time and verbally give the operator the following access code: 7045414.

An audio replay of the call will be available beginning August 2, 2007 at 4:00 P.M. Eastern for one week through August 9, 2007, and can be accessed by dialing 877-528-4487 and using the following access code: 63143288#.

A web stream replay of the call will be available for 30 days through September 1, 2007 at the following link: http://app.replayrecorder.com/budget?replaycode=63143288.

About Hudson Technologies