Hudson Technologies Reports Results For Fourth Quarter And Year End 2011

Hudson Technologies, Inc. (NASDAQ: HDSN), announced results for the fourth quarter and year ended December 31, 2011.

Revenues for the three months ended December 31, 2011 decreased 7% to $3,857,000 from $4,140,000 in the comparable 2010 period. Hudson reported gross profit margin of 21% for the fourth quarter of 2011 compared to 33% in the fourth quarter last year. The Company also reported a net loss of $722,000 or $0.03 per basic and diluted share for the fourth quarter of 2011, compared to a net loss of $556,000 or $0.02 per basic and diluted share for the fourth quarter of 2010.

For the year ended December 31, 2011, revenues increased 19% to $44,322,000 as compared to revenues of $37,273,000 for the year ended December 31, 2010. Gross profit margin for 2011 was 20% compared to 22% in 2010. The Company reported net income of $1,034,000, or $0.04 per basic and diluted share in 2011 compared to net income of $701,000, or $0.03 per basic and diluted share, in 2010. Income tax expense of $634,000 and $363,000 for the 2011 and 2010 periods, respectively, is largely a non-cash item as a result of the Company’s deferred tax asset.

Kevin J. Zugibe, Chairman and Chief Executive Officer of Hudson Technologies commented, “We are pleased to report another year of record revenues, with 19% revenue growth for the year. The increase in revenues was accomplished despite a reduction in the sales price of certain refrigerants in 2011, so we believe we are well positioned for continued growth in 2012. Our fourth quarter is typically our slowest quarter due to the seasonality of our business. Comparatively, the fourth quarter of 2010 saw higher service revenues and corresponding margins, while this year’s fourth quarter service revenues were closer to historical levels.

“In early January 2012, the United States Environmental Protection Agency (“EPA”) published a proposed rule which provides a range of material reductions in allowances for the production and consumption of virgin Hydrochlorofluorocarbon-22 (R-22) for calendar years 2012, 2013 and 2014. A final rule establishing the actual production and consumption limits for those years will not be final until later this year. In the interim, the EPA issued ‘No Action Assurance’ letters in January 2012 to producers and importers of R-22 that until the issuance of a final rule, reduces the amount of R-22 that can be manufactured and/or imported in 2012 by approximately 45% from the amount allowed in 2011.

“Following the issuance of the EPA No Action Assurance letters, the industry saw an immediate and dramatic increase in the price of R-22. We have been anticipating production reductions and related R-22 price increases for some time and are pleased to see these changes becoming a reality. While the industry reacted rapidly to the EPA’s No Action Assurance letters through increased prices, the longer term impact on R-22 pricing will not be fully known until the EPA issues a final rule setting allocations for 2012 through 2014.

“We believe the current price increases create a favorable market environment that will support the growth of our reclamation business. With higher R-22 prices, there is an economic incentive for contractors to capture ‘dirty’ gas rather than vent it. We believe this incentive will provide Hudson the opportunity to acquire an increased number of pounds of refrigerant that we can reclaim to virgin specifications and then resell in the marketplace to help fill the supply gap that has been created by the EPA as R-22 production phases out.

“This is a very exciting time for our Company. We’ve been carefully planning and preparing for this industry shift for several years and believe we are well positioned to substantially increase revenues and earnings beyond the growth we’ve achieved over the past few years.”

CONFERENCE CALL INFORMATION

The Company will host a conference call to discuss the fourth quarter and year end results today, March 6, 2012 at 10:00 A.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 webcast will be available until April 6, 2012 and may be accessed by dialing (877) 660-6853 and international callers may dial (201) 612-7415. Callers should use account number 286 and pass code 390085.

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 Reform Act of 1995

Statements contained herein which are not historical facts constitute forward-looking statements. Such 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, risks associated with the Company’s joint venture which include the ability of the parties to perform their obligations under the joint venture agreement, any delays or interruptions in bringing products and services to market, the timely availability of any requisite permits and authorizations from governmental entities and third parties as well as factors relating to doing business outside the United States, including changes in the laws, regulations, policies, and political, financial and economic conditions, including inflation, interest and currency exchange rates, of countries in which the joint venture may seek to conduct business, 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.

Hudson Technologies, Inc. and subsidiaries

Consolidated Balance Sheets

(Amounts in thousands, except for share and par value amounts)
  December 31,
  2011       2010  

Assets
Current assets:
Cash and cash equivalents $ 3,958 $ 3,926
Trade accounts receivable - net 2,453 1,767
Inventories 17,734 18,211
Prepaid expenses and other current assets   611     376  
Total current assets 24,756 24,280
Property, plant and equipment, less accumulated depreciation and amortization 3,441 3,008
Other assets 79 66
Deferred tax asset 3,086 3,669
Intangible assets, less accumulated amortization   89     73  
Total Assets $ 31,451   $ 31,096  

Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable and accrued expenses $ 5,227 $ 6,350
Accrued payroll 703 693
Short-term debt and current maturities of long-term debt   6,361     5,012  
Total current liabilities 12,291 12,055
Long-term debt, less current maturities   121     1,018  
Total Liabilities   12,412     13,073  
Commitments and contingencies
Stockholders' equity:

Preferred stock, shares authorized 5,000,000: Series A Convertible Preferred stock, $0.01 par value ($100 liquidation preference value); shares authorized 150,000; none issued or outstanding

- -

- -

Common stock, $0.01 par value; shares authorized 50,000,000; issued and outstanding 23,783,106 and 23,780,606
238 238
Additional paid-in capital 42,869 42,887
Accumulated deficit   (24,068 )   (25,102 )
Total Stockholders' Equity   19,039     18,023  
Total Liabilities and Stockholders' Equity $ 31,451   $ 31,096  

Hudson Technologies, Inc. and subsidiaries

Consolidated Income Statements

(unaudited)

(Amounts in thousands, except for share and per share amounts)
   

Three month period

ended December 31,

Year ended

December 31,
  2011       2010     2011       2010  
 
Revenues $ 3,857 $ 4,140 $ 44,322 $ 37,273
Cost of sales   3,051     2,786     35,637     29,241  
Gross Profit   806     1,354     8,685     8,032  
Operating expenses:
Selling and marketing 493 648 2,153 2,193
General and administrative, includes $69 and $182 for share-based payment arrangements   1,311     1,230     4,004     3,687  
Total operating expenses   1,804     1,878     6,157     5,880  
Operating income (loss) (998 ) (524 ) 2,528 2,152
Total other expense   (167 )   (297 )   (860 )   (1,088 )
 
Income (loss) before income taxes (1,165 ) (821 ) 1,668 1,064
Income tax expense (benefit)   (443 )   (265 )   634     363  
Net income (loss)   ($722 )   ($556 ) $ 1,034   $ 701  
Net income (loss) per common share – Basic   ($0.03 )   ($0.02 ) $ 0.04   $ 0.03  
Net income (loss) per common share - Diluted   ($0.03 )   ($0.02 ) $ 0.04   $ 0.03  

Weighted average number of shares outstanding – Basic
  23,781,439     23,780,606     23,780,814     22,373,773  

Weighted average number of shares outstanding - Diluted
  23,781,439     23,780,606     24,803,047     23,723,650  

Copyright Business Wire 2010

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