Hudson Technologies, Inc. (NASDAQ:HDSN) announced results for the third quarter ended September 30, 2016.
The Company achieved record revenues for the three months ended September 30, 2016 of $34.9 million, an increase of 61% compared to $21.7 million in the comparable 2015 period. The revenue increase in the quarter is primarily related to an increase in the price of certain refrigerants, and an increase in the volume of certain refrigerants sold. Gross margin improved to 34% in the third quarter of 2016 compared to 20% in the prior year period. Net income for the quarter was $4.8 million, or $0.14 per basic and diluted share, compared to net income of $1.1 million, or $0.03 per basic and diluted share, in the third quarter of 2015.
For the first nine months of 2016, Hudson recorded revenues of $97.7 million, a 35% increase as compared to $72.4 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 31% in the first nine months of 2016 as compared to 24% in the first nine months of 2015. Net income for the first nine months of 2016 was $12.6 million, or $0.38 per basic and $0.37 per diluted share, compared to $5.8 million or $0.18 per basic and $0.17 per diluted share in the first nine months of 2015.
During the third quarter, as previously announced, the Company was 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 10-year 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, “We’re pleased with our strong third quarter results which include record revenues, significantly improved gross margin and enhanced profitability. We saw a strong finish to our nine-month refrigerant season, as evidenced by our results, and benefited from increases in the average selling price for R-22 refrigerant at a rate faster than we had previously anticipated.”
Mr. Zugibe further stated, “Just two weeks ago, the parties to the Montreal Protocol reached an agreement to amend the Montreal Protocol to provide for a global phase down of HFC compounds by 85% between now and 2047. The agreement has been called a ‘major policy step forward in the global effort to reduce greenhouse gas emissions.’ Hudson has been a longtime advocate for the orderly phase out of refrigerants with high global warming potential, and we believe a strong refrigerant reclamation program is essential to facilitate and accelerate the phase down of HFCs. The US is now in a position to ratify and create a program to limit and eventually eliminate the production of HFC refrigerants within the guidelines of developed nations as provided in the amendment.
“As the leading reclaimer, with proprietary technology, significant geographic reach, established infrastructure and growth capacity, we believe we are well positioned to continue our leadership role in the systematic and global phase out of refrigerants currently in use, as well as next generation refrigerants. Additionally, we believe our long term experience in the industry, coupled with our technological expertise and longstanding industry relationships, uniquely positions us to assist our customers as they contend with ongoing and future refrigerant phase outs.”
Mr. Zugibe concluded, “We are very pleased with the results of our third quarter and with our performance throughout the refrigerant sales season. This is an exciting time for our Company and we look forward to playing a key role in the phase out of these gases and to providing support to our industry as it continues to develop efficient, next generation, climate and ozone friendly technologies and refrigerants.”
CONFERENCE CALL INFORMATION
The Company will host a conference call to discuss the third quarter results today, November 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 December 2, 2016 and may be accessed by dialing (877) 660-6853. International callers may dial (201) 612-7415. Callers should use conference ID: 13647219.
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.
