Hudson Technologies Reports Fourth Quarter 2018 Results
Pearl River, NY – March 6, 2019 – Hudson Technologies, Inc. (NASDAQ: HDSN) announced results for the fourth quarter and year ended December 31, 2018. The financial results for both 2018 and 2017 include the operations of Aspen Refrigerants, Inc. (“ARI”) which was acquired on October 10, 2017.
For the quarter ended December 31, 2018 Hudson reported revenues of $25.7 million, an increase of 5% compared to $24.6 million in the comparable 2017 period, which was primarily attributable to a 38% increase in the number of pounds of certain refrigerants sold, partially offset by price declines of certain refrigerants. Gross margin in the fourth quarter of 2018 was 12%, essentially consistent with gross margin of 12.3% in the fourth quarter of 2017. The Company recorded a net loss of $8.1 million or ($0.19) per basic and diluted share in the fourth quarter of 2018, as compared to a net loss of $5.2 million or ($0.12) per basic and diluted share in the same period of 2017. During the fourth quarter of 2018 there were no benefits for income taxes, compared to a $7.4 million income tax benefit during the fourth quarter of 2017 related to the Tax Cuts & Jobs Act.
For the year ended December 31, 2018, Hudson reported revenues of $166.5 million, an increase of 19% compared to $140.4 million for full year 2017. The Company had negative gross margin for 2018 due to a non-cash inventory write down of approximately $35.9 million and an additional amortization of inventory step-up in basis of approximately $3.7 million, as compared to a gross margin of 27% in 2017. The Company’s net loss for 2018 was $55.7 million, or ($1.31) per basic and diluted share, which included non-cash inventory adjustments totaling approximately $39.6 million and non-recurring expense of approximately $6.1 million primarily related to the acquisition and integration of ARI, as compared to net income of $11.2 million or $0.27 per basic and $0.26 per diluted share in 2017. Full year 2017 net income includes the aforementioned $7.4 million benefit related to the Tax Cuts & Jobs Act.
Kevin J. Zugibe, Chairman and Chief Executive Officer of Hudson Technologies commented,
“2018 was a challenging year, characterized by one of the most difficult selling seasons we’ve experienced to date. In addition to severe price corrections in nearly all of the refrigerants we sell, a ‘just-in-time’ buying pattern emerged, which resulted in lower than expected demand throughout the traditional nine-month selling season. During the fourth quarter of 2018 however, we saw an increase in demand for certain refrigerants, an unusual development as our fourth quarter is typically characterized by negligible sales volume. While the demand increase was offset by lower pricing, we were pleased to see this increased order activity from our customer base.
“During the fourth quarter we implemented several efficiency initiatives which we expect to complete by the end of March 2019. The resulting annual benefit from these initiatives is expected to be over $3 million in cost reductions. Additionally, we believe we have the opportunity to drive improved margins in 2019 as we replace higher priced inventory with lower priced product. In addition, despite the headwinds we faced in 2018, the Company generated $36 million of cash flow from operations and paid down $37 million of debt in 2018.
“We’re optimistic about the positive momentum we’re seeing for the regulation of HFC refrigerants. With the anticipated phase down of HFCs, we expect to see the establishment of an allocation system as well as a tightening in the supply/demand balance that will likely result in increased pricing. We believe the phase out of R-22 and phase down of HFCs continue to represent tremendous growth opportunities for our company.”
Mr. Zugibe concluded, “As we progress through 2019, we believe our longstanding customer base, diversified product offerings and efficient and expanded distribution network leave us well positioned to capitalize on the market opportunities we are seeing with existing and next generation refrigerants. We remain focused on meeting the needs of our customers and exceeding their expectations in terms of product availability and delivery as we work to increase our market share and advance our leadership position in the marketplace.”
Hudson Technologies to Host Conference Call to Discuss Fourth Quarter 2018 Results
PEARL RIVER, NY – February 22, 2019 – Hudson Technologies, Inc. (NASDAQ: HDSN) will host a conference call and webcast on Wednesday, March 6, 2019 at 5:00 p.m. Eastern Time to discuss the Company’s fourth quarter results.
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 April 6, 2019 and may be accessed by dialing (877) 481-4010. International callers may dial (919) 882-2331. Callers should use conference ID: 44519.
Hudson Technologies to Acquire Airgas-Refrigerants, Inc.
PEARL RIVER, NY – AUGUST 9, 2017 – Hudson Technologies, Inc. (NASDAQ: HDSN) (“Hudson”) today announced that it has entered into a definitive agreement to acquire Airgas-Refrigerants, Inc. (“ARI”), a subsidiary of Airgas, Inc., a leading U.S. supplier of industrial gases, in a transaction valued on a gross basis at approximately $220 million, subject to closing and post-closing adjustments.
ARI is a leading refrigerant distributor and EPA certified reclaimer in the U.S. ARI distributes, reclaims and packages refrigerant gases for a variety of end uses.
Potential benefits of the acquisition include:
- ARI’s HFC distribution business will favorably position Hudson as the industry shifts from Hydrochlorofluorocarbons (HCFCs) to Hydrofluorocarbons (HFCs).
- Broader customer network will provide Hudson with access to refrigerant for reclamation while also strengthening distribution capabilities.
- Adding incremental reclamation processing capacity to support the anticipated growth in reclamation volume from the ongoing phase out of HCFC (R-22) production and the future phase down of HFC production.
- Enabling Hudson to sell its state-of-the-art Global Energy Services offerings to a broader base of customers.
- Enhancing geographic footprint in the U.S.
- Combining two highly complementary businesses.
As of March 31, 2017, trailing 12 month pro forma revenue of the combined business is approximately $250 million. The transaction is expected to be accretive to earnings beginning one year following the close of the transaction.
The acquisition will be financed with available cash balances plus borrowings under an enhanced asset based lending facility of $150 million from PNC Bank and a new term loan from funds advised by FS Investments and sub-advised by GSO Capital Partners LP of between $95 million and $110 million. No additional Hudson equity will be issued to finance this transaction.
Kevin J. Zugibe, Chairman and Chief Executive Officer of Hudson Technologies commented, “This will be a transformative acquisition for our company, enhancing our business by providing a complementary product portfolio, expanding our geographic footprint and customer base and significantly expanding our sales and distribution capabilities. ARI is a prominent refrigerant distributor in the United States and we believe the combination of our operations will provide meaningful scale to our business and further enhance Hudson’s leadership in the refrigerant and reclamation industry.
“The increased scale of the combined company will allow us to better serve our customers during the ongoing phase out of HCFC refrigerants and positions us better to serve an expanded customer base during the future phase down of HFC refrigerants. Additionally, this acquisition gives us access to a significantly larger customer base and a new audience for our Global Energy Services offerings, a growing focus of our business which provide optimization solutions, engineering assessments and energy management tools.”
Mr. Zugibe continued, “With the acquisition of ARI, we look forward to leveraging our strengthened capabilities, expertise and reach to meet the needs of an expanded customer base. We look forward to serving our existing and acquired customers with our expanded portfolio of products and services.”
The acquisition of ARI is subject to customary closing conditions, including the consummation of the contemplated debt financing, and the expiration or termination of the applicable waiting periods under the Hart-Scott-Rodino Antitrust Improvements Act, and is currently expected to close in 2017.
William Blair & Co. is acting as Hudson’s exclusive financial advisor for the transaction and the law firm of Wiggin and Dana LLP is serving as the Company’s legal counsel.
Hudson Technologies Reports Record Revenues of $52.2 Million for Second Quarter 2017; Diluted EPS of $0.20
PEARL RIVER, NY – AUGUST 9, 2017 – Hudson Technologies, Inc. (NASDAQ: HDSN) announced results for the second quarter and six months ended June 30, 2017.
The Company reported record revenues of $52.2 million for the second quarter ended June 30, 2017, an increase of 51% compared to $34.6 million in the comparable 2016 period. The revenue increase in the quarter is primarily related to both price and volume increases of certain refrigerants sold. Gross margin in the second quarter of 2017 was 33% compared to 30% in the prior year period. Net income for the quarter, including the recognition of $0.8 million of non-recurring SG&A expense related to corporate development initiatives, was $8.5 million, or $0.21 per basic and $0.20 per diluted share, compared to net income of $4.8 million, or $0.15 per basic and $0.14 diluted share, in the second quarter of 2016.
For the six months ended June 30, 2017, Hudson reported revenues of $91.1 million, a 45% increase compared to $62.8 million in the comparable 2016 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 33% for the first half of 2017 compared to 29% for the first half of 2016. Net income for the first six months of 2017 was $14.3 million, or $0.34 per basic and $0.33 per diluted share, compared to $7.8 million or $0.24 per basic and $0.23 per diluted share in 2016.
Kevin J. Zugibe, Chairman and Chief Executive Officer of Hudson Technologies commented,
“We’re very pleased to have built upon our strong first quarter performance to deliver record revenues, enhanced margins and significantly improved profitability in the second quarter of 2017. During the second quarter, which is the midpoint of our nine-month refrigerant sales season, our results were particularly strong as we saw increased sales volume for refrigerants and benefitted from incremental increases in the average selling price for R-22 refrigerant as well as a temporary increase in pricing for HFC refrigerants.”
Mr. Zugibe continued, “In addition to the evident gains we are realizing through our sales of virgin refrigerants, we also see a tremendous opportunity associated with our ability to reclaim refrigerants as we enter the final years of the R-22 production phase out, which will be completed by the end of 2019, and look toward the anticipated phase-down of HFC refrigerants. As the industry transitions to new technology and next generation refrigerants, Hudson, as a leading reclaimer, is well positioned to apply our reclamation capabilities to help fill demand for refrigerants as virgin production is phased down and eliminated. We remain focused on leveraging our expansive distribution network, decades of experience and long-standing customer relationships to capitalize on opportunities that arise from the evolving industry landscape.”
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)
Brian F. Coleman, President & COO
Hudson Technologies, Inc.