PEARL RIVER, NY – OCTOBER 29, 2014 – Hudson Technologies, Inc. (NASDAQ: HDSN) announced results for the quarter ended September 30, 2014.
Revenues for the three months ended September 30, 2014 were $15.3 million, an increase of 1% compared to $15.2 million in the third quarter of 2013. The revenue increase in the quarter is primarily related to an increase in sales volumes of certain refrigerants offset by a decrease in the selling price of certain refrigerants. Net loss for the quarter was $108,000, or $0.00 per basic and diluted share, compared to a net loss of $9.1 million, or $0.36 per basic and diluted share, in the third quarter of 2013. During the third quarter of 2013, Hudson recorded a lower-of-cost-or-market inventory adjustment (“LCM inventory adjustment”) of $14.7 million. The LCM inventory adjustment significantly increased the Company’s cost of sales in the third quarter of 2013.
For the first nine months of 2014, Hudson recorded revenues of $47.8 million compared to $53.8 million in the comparable 2013 period. The decrease in revenues was primarily due to a decrease in R-22 pricing, partially offset by increased volume in the first nine months of 2014. Net income for the first nine months of 2014 was $360,000 or $0.01 per basic and diluted share, compared to a net loss of $4.3 million or $0.17 per basic and diluted share in the first nine months of 2013. Net loss for the first nine months of 2013 included the $14.7 million LCM inventory adjustment detailed above in the third quarter discussion.
Kevin J. Zugibe, Chairman and Chief Executive Officer of Hudson Technologies commented, “We have finally put behind us the remnants of last year’s inventory adjustment that resulted from the challenges associated with the EPA’s final ruling in April of 2013. Throughout the past eighteen months we continued to focus on developing new customer relationships while continuing to meet the needs of our existing customers, which contributed to our ability to drive gains in volume and service revenues. We view the reclamation of R-22, as well as of the next generation refrigerants, as an important market opportunity and believe we are well positioned to drive both organic and inorganic growth.”
Mr. Zugibe continued, “Moreover, we are very pleased with the EPA’s final rule signed on October 16, 2014, which established R-22 allowances for 2015 through 2019, and which put forward a significantly more aggressive phase-out schedule than originally proposed. The final rule provides 2015 allowances of 22 million pounds, a nearly 60% reduction from 2014 levels, and provides annual reductions, with final production to end by 2019. We have consistently stated that a more aggressive approach is the best method to achieve the orderly phase out of R-22 and to establish reclamation as the primary, and as of 2020 the sole source of R-22 refrigerant. As we approach 2020, when there will be no virgin R-22 production, the anticipated R-22 aftermarket supply gap will need to be filled by the reclamation industry. As one of the leading reclaimers in the marketplace, this is a very exciting development for Hudson, and one that we believe represents a significant long term growth opportunity for our Company.”
CONFERENCE CALL INFORMATION
The Company will host a conference call to discuss the third quarter results today, October 29, 2014 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) 407-9205 approximately five minutes prior to the scheduled start time. International callers please dial (201) 689-8054.
A replay of the teleconference will be available until November 29, 2014 and may be accessed by dialing (877) 660-6853. International callers may dial (201) 612-7415. Callers should use conference ID: 13593439.