PEARL RIVER, NY – August 2, 2016 – Hudson Technologies, Inc. (NASDAQ: HDSN) announced results for the second quarter ended June 30, 2016.
The Company achieved record revenues for the three months ended June 30, 2016 of $34.6 million, an increase of 21% compared to $28.6 million in the comparable 2015 period. The revenue increase in the quarter is primarily related to an increase in the price of certain refrigerants, slightly offset by reduced volumes of certain refrigerants sold. Gross margin improved to 30% in the second quarter of 2016 compared to 25% in the prior year period. Net income for the quarter was $4.8 million, or $0.15 per basic and $0.14 per diluted share, compared to net income of $2.8 million, or $0.09 per basic and $0.08 per diluted share, in the second quarter of 2015.
For the first six months of 2016, Hudson recorded revenues of $62.8 million, a 24% increase as compared to $50.7 million in the comparable 2015 period. The increase is primarily related to a higher selling price of certain refrigerants and higher volumes of certain refrigerants sold. Gross margin increased to 29% in the first half of 2016 as compared to 25% in the first half of 2015. Net income for the first half of 2016 was $7.8 million, or $0.24 per basic and $0.23 per diluted share, compared to $4.7 million or $0.14 per basic and diluted share in the first half of 2015.
Subsequent to the close of the second quarter, the Company announced that it has been awarded, as the prime contractor, a five-year contract including a five-year renewal option, by the United States Defense Logistics Agency (“DLA”) with an estimated maximum value over the term of the agreement of $400 million in sales to the Department of Defense (“DoD”). The contract is for the management and supply of refrigerants, compressed gases, cylinders and related items to the U.S. Military Commands and Installations, Federal civilian agencies and Foreign Militaries. Primary users include the U.S. Army, Navy, Air Force, Marine Corps and Coast Guard.
Kevin J. Zugibe, Chairman and Chief Executive Officer of Hudson Technologies commented, “Building on the momentum from our strong first quarter performance, we’re very pleased to have delivered record revenues, enhanced margins and significantly improved profitability in the second quarter of 2016. During the quarter, which represents the midpoint of our nine- month refrigerant sales season, we benefitted from continued increases in the average selling price for R-22 refrigerant.
“We continue to see growth in our reclamation business. We believe there is a broader opportunity for reclamation in response to both the ongoing R-22 production phase-out and for the expected phase-out of next generation HFC-based refrigerants. HFCs, which are the replacement refrigerants for HCFCs such as R-22, have drawn concern from the global community due to their high global warming potential and have also been targeted for a global phase down. Hudson is the largest reclaimer in the industry, and we believe our proprietary technology, strong distribution network and longstanding relationships make us the best resource for our customers as they prepare for ongoing and upcoming refrigerant phase-outs.”
Mr. Zugibe concluded, “We are very excited about winning a substantial contract from the DoD. While the ultimate amount of revenue we receive will be determined by order levels, we believe this contract will contribute considerable future revenue and earnings growth and provide future opportunities for Hudson to generate revenues from the Federal government as a prime contractor.”
CONFERENCE CALL INFORMATION
The Company will host a conference call to discuss the first quarter results today, August 2, 2016 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 September 2, 2016 and may be accessed by dialing (877) 660-6853. International callers may dial (201) 612-7415. Callers should use conference ID: 13641632.