PEARL RIVER, NY – AUGUST 5, 2020 – Hudson Technologies, Inc. (NASDAQ: HDSN) announced results for the second quarter and six months ended June 30, 2020.
For the quarter ended June 30, 2020, Hudson reported revenues of $47.7 million, a decrease of 14.8% compared to revenues of $56.0 million in the comparable 2019 period. The decrease is primarily due to a decline in volume, partially offset by an increase in selling price, of certain refrigerants sold during the second quarter of 2020, compared to the second quarter of 2019. Gross margin in the second quarter of 2020 was 26.6%, compared to negative gross margin in the second quarter of 2019. The Company reported operating income of $5.2 million for the second quarter of 2020 compared to an operating loss of $10.0 million in the second quarter of 2019. During the second quarter of 2019 the Company recorded a lower of cost or net realizable value adjustment to its inventory of $9.2 million, mainly due to declines in selling prices of certain refrigerants at that time. The Company recorded net income of $2.4 million or $0.06 per basic and diluted share in the second quarter of 2020, compared to a net loss of $13.8 million or ($0.32) per basic and diluted share in the same period of 2019.
For the six months ended June 30, 2020, Hudson reported revenues of $84.0 million, a decrease of 7.4% compared to $90.7 million in the first six months of 2019. The decrease in revenue was primarily due to decreased volume, partially offset by increased pricing of certain refrigerants. Gross margin for the first six months of 2020 improved to 25.0% compared to gross margin of 5.1% in the first half of 2019. The Company reported operating income of $5.6 million for the first six months of 2020 compared to an operating loss of $9.7 million in the same period of 2019. The Company’s net loss for the first six months of 2020 was $0.5 million, or ($0.01) per basic and diluted share, compared to a net loss of $17.8 million, or ($0.42) per basic and diluted share, in the first half of 2019, which included the above mentioned $9.2 million non-cash inventory adjustment.
Brian F. Coleman, President and Chief Executive Officer of Hudson Technologies commented, “We were pleased to deliver solid second quarter results, particularly as we continue to navigate the challenging landscape associated with the COVID-19 virus and the associated impact to our economy. During the quarter, the closures to public venues, such as office buildings, recreation centers, schools and universities across the U.S. impacted end markets and demand for refrigerants. While pricing remained consistent in the quarter, volume declines adversely impacted our overall revenues. Nonetheless, we delivered improved gross margin for the quarter, achieved solid operating income and returned to profitability.
“There are still many uncertainties associated with this pandemic and we remain focused on the elements of our business that we can control: protecting the health and safety of our employees and keeping our products in supply to best serve our customers across all channels. We’ve been in this business for more than thirty years, and our ability to adapt to changing economic and industry landscapes while executing our operational strategy is a strength we continue to rely upon. Despite the challenging market environment, Hudson generated over $6 million of operating cash flow during the second quarter of 2020. The Company’s financial position and liquidity remain strong, with total liquidity at June 30, 2020 of approximately $39 million, which includes cash and revolver availability. Finally, as announced in an 8-K this past Monday, we’ve met certain performance targets set forth in our Credit Agreement, and as a result of this achievement, we have terminated the services of our Chief Restructuring Officer.
“As you know, in late June, our Company suffered the unexpected loss of our founder Kevin J. Zugibe, P.E. He was an industry pioneer who brought remarkable passion, expertise and energy to Hudson, and he is greatly missed. In his years building the Company, Kevin recognized the importance of establishing a strong management team to drive and support Hudson’s growth. All of our employees are committed to continuing to grow and execute on Kevin’s legacy, and as one of Kevin’s longstanding partners for over 20 years, I can assure you that we are focused on our Company’s success as we move through the coming months and years,” Mr. Coleman concluded.
Conference Call Information
The Company will host a conference call and webcast to discuss the second quarter results today, August 5, 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 (844) 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 September 4, 2020 and may be accessed by dialing (877) 481-4010. International callers may dial (919) 882-2331. Callers should use conference ID: 35826.