• Hudson Technologies Reports Record Fourth Quarter and Year End 2021 Results

    Source: Nasdaq GlobeNewswire / 08 Mar 2022 15:05:01   America/Chicago

    WOODCLIFF LAKE, N.J., March 08, 2022 (GLOBE NEWSWIRE) -- Hudson Technologies, Inc. (NASDAQ: HDSN) announced results for the fourth quarter and year ended December 31, 2021.

    For the quarter ended December 31, 2021, Hudson reported revenues of $37.8 million, an increase of 71% compared to revenues of $22.1 million in the comparable 2020 period. Fourth quarter revenue growth was driven by increased selling prices for certain refrigerants during the period. Gross margin in the fourth quarter of 2021 was 45%, compared to 25% in the fourth quarter of 2020, mainly due to the aforementioned increase in selling price of certain refrigerants. Hudson reported operating income of $9.3 million in the fourth quarter of 2021, compared to an operating loss of $1.7 million in the prior year period. The Company recorded net income of $6.2 million or $0.14 per basic and $0.13 per diluted share in the fourth quarter of 2021, compared to a net loss of $4.7 million or ($0.11) per basic and diluted share in the same period of 2020.

    For the year ended December 31, 2021, Hudson reported revenues of $192.7 million, an increase of 31% compared to revenues of $147.6 million for full year 2020. The revenue growth was driven by increased selling prices for certain refrigerants during the period. Gross margin during for the year ended December 31, 2021 was 37%, compared to 24% for full year 2020, mainly due to the aforementioned increase in selling price of certain refrigerants. Hudson reported operating income of $42.3 million for full year 2021 compared to operating income of $5.9 million in the prior year. The Company recorded net income of $32.3 million or $0.74 per basic and $0.69 per diluted share in fiscal 2021, compared to a net loss of $5.2 million or ($0.12) per basic and diluted share in fiscal 2020.

    Subsequent to the close of the fourth quarter, the Company announced it has entered into a new $85 million term loan agreement with TCW Asset Management, LLC and has amended its existing asset-based lending facility to increase the overall facility to $90 million. In conjunction with entering into the new term loan facility and amended revolving credit facility, the Company’s existing term loan was repaid in full and terminated.

    Brian F. Coleman, President and Chief Executive Officer of Hudson Technologies commented,
    “We’re pleased to have closed 2021 with record fourth quarter and full year results, reflecting significant revenue growth, enhanced margins and improved profitability. Our fourth quarter has historically been our weakest, as it falls outside of our traditional nine-month selling season from January to September. However, following the close of the 2021 selling season, the industry saw continued strength in the average selling prices of certain refrigerants. Assuming this pricing trend continues for the 2022 selling season, we could see revenues exceeding $270 million in 2022. As we begin moving through 2022, we are focused on maintaining effective inventory management so that we are well positioned to meet customer demand as virgin HFCs begin to become scarce.

    “As we’ve previously discussed, the AIM Act has introduced a mandated 10% stepdown in production and consumption allowances for virgin HFCs in 2022 from the original baseline. This presents an opportunity for Hudson, since the installed base of HFC equipment continues to expand, and as virgin supply tightens, we expect the demand for HFCs will drive accelerated reclamation activity to fill the anticipated supply gap. With our industry-leading reclamation capabilities, longstanding customer relationships and efficient distribution network, we are positioned to enable the transition to greener refrigerants. Since our Company’s inception, we have been committed to providing a sustainable alternative to virgin refrigerant production, and our technology is capable of reclaiming all types of refrigerant, including next generation HFO gases. As we move through 2022, we believe we have a tremendous opportunity to continue our support of the industry transition to greener refrigerants and to grow our market position as both a supplier and a reclaimer servicing the evolving refrigerant landscape.

    “We are pleased to have completed the refinancing of our debt, which we believe will provide enhanced financial flexibility for the continued growth of our business. With the new debt structure, our cost of capital and interest expense will improve meaningfully, with an approximate 3% reduction in the overall effective interest rate. We appreciate the support of our new and existing lending partners and look forward to driving long-term growth and cash flows as our reclamation services play an increasingly important role in the transition to more environmentally friendly refrigerants,” Mr. Coleman concluded.

    Conference Call Information

    The Company will host a conference call and webcast to discuss the fourth quarter and year end results today, March 8, 2022 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 (888) 506-0062 approximately five minutes prior to the scheduled start time. International callers please dial (973) 528-0011. Callers should use entry code: 470091.

    A replay of the teleconference will be available until April 7, 2022 and may be accessed by dialing (877) 481-4010. International callers may dial (919) 882-2331. Callers should use conference ID: 44781.

    About Hudson Technologies         

    Hudson Technologies, Inc. is a leading provider of innovative and sustainable refrigerant products and services to the Heating Ventilation Air Conditioning and Refrigeration industry. For nearly three decades, we have demonstrated our commitment to our customers and the environment by becoming one of the first in the United States and largest refrigerant reclaimers through multimillion dollar investments in the plants and advanced separation technology required to recover a wide variety of refrigerants and restoring them to Air-Conditioning, Heating, and Refrigeration Institute standard for reuse as certified EMERALD Refrigerants™.   The Company's products and services are primarily used in commercial air conditioning, industrial processing and refrigeration systems, and include refrigerant and industrial gas sales, refrigerant management services consisting primarily of reclamation of refrigerants and RefrigerantSide® Services performed at a customer's site, consisting of system decontamination to remove moisture, oils and other contaminants. The Company’s SmartEnergy OPS® service is a web-based real time continuous monitoring service applicable to a facility’s refrigeration systems and other energy systems. The Company’s Chiller Chemistry® and Chill Smart® services are also predictive and diagnostic service offerings. As a component of the Company’s products and services, the Company also generates carbon offset projects.

    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 laws and regulations affecting the industry, changes in the demand and price 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 that 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, the ability to meet financial covenants under existing credit facilities, 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 Company may seek to conduct business, the Company’s ability to successfully integrate any assets it acquires from third parties into its operations, the impact of the current COVID-19 pandemic, and other risks detailed in the Company's 10-K for the year ended December 31, 2020 and other subsequent filings 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
    IMS Investor Relations
    (203) 972-9200
    jnesbett@institutionalms.com
    Company Contact:
    Brian F. Coleman, President & CEO
    Hudson Technologies, Inc.
    (845) 735-6000
    bcoleman@hudsontech.com


     
    Hudson Technologies, Inc. and Subsidiaries
    Consolidated Balance Sheets
    (Amounts in thousands, except for share and par value amounts)
     
      December 31, 
      2021  2020 
    Assets        
    Current assets:        
    Cash and cash equivalents $3,492  $1,348 
    Trade accounts receivable – net  14,223   9,806 
    Inventories  94,144   44,460 
    Prepaid expenses and other current assets  10,422   6,528 
    Total current assets  122,281   62,142 
             
    Property, plant and equipment, less accumulated depreciation  20,093   21,910 
    Goodwill  47,803   47,803 
    Intangible assets, less accumulated amortization  20,357   23,150 
    Right of use asset  6,803   6,559 
    Other assets  710   85 
    Total Assets $218,047  $161,649 
             
    Liabilities and Stockholders' Equity        
    Current liabilities:        
    Trade accounts payable $11,955  $7,562 
    Accrued expenses and other current liabilities  30,637   19,499 
    Accrued payroll  3,931   1,394 
    Current maturities of long-term debt  5,248   7,314 
    Short-term debt  15,000   2,000 
    Total current liabilities  66,771   37,769 
    Deferred tax liability  1,692   1,355 
    Long-term lease liabilities  5,500   3,927 
    Long-term debt, less current maturities, net of deferred financing costs  73,145   77,976 
    Total Liabilities  147,108   121,027 
             
    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 100,000,000; issued and        
    outstanding: 44,758,925 and 43,347,887 respectively  448   433 
    Additional paid-in capital  116,312   118,269 
    Accumulated deficit  (45,821)  (78,080)
    Total Stockholders' Equity  70,939   40,622 
             
    Total Liabilities and Stockholders' Equity $218,047  $161,649 


    Hudson Technologies, Inc. and Subsidiaries
    Consolidated Statements of Operations
    (unaudited)
     
    (Amounts in thousands, except for share and per share amounts)
     
      Three months
    ended December 31,
     Twelve months
    ended December 31,
     
      2021  2020
     2021  2020 
    Revenues $37,775  $22,110  $192,748  $147,605 
    Cost of sales  20,755   16,684   121,084   112,195 
    Gross profit  17,020   5,426   71,664   35,410 
                    
    Operating expenses:               
    Selling, general and administrative  6,980   6,460   26,566   26,644 
    Amortization  698   715   2,793   2,862 
    Total operating expenses  7,678   7,175   29,359   29,506 
                    
    Operating income  9,342   (1,749)  42,305   5,904 
                    
    Other (expense) income:               
    Net interest expense  (2,844)  (2,918)  (11,376)  (12,330)
    Other income  -   22   2,470   1,033 
    Total other (expense)  (2,844)  (2,896)  (8,906)  (11,297)
                    
    Income (loss) before income taxes  6,498   (4,645)  33,399   (5,393)
                    
    Income tax expense (benefit)  310   103   1,140   (185)
                    
    Net income (loss) $6,188  $(4,748) $32,259  $(5,208)
                    
    Net income (loss) per common share – Basic $0.14  $(0.11) $0.74  $(0.12)
    Net income (loss) per common share – Diluted $0.13  $(0.11) $0.69  $(0.12)
    Weighted average number of shares outstanding – Basic  44,318,805   42,881,307   43,765,443   42,710,381 
    Weighted average number of shares outstanding – Diluted  46,828,212   42,881,307   46,640,822   42,710,381 

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