UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

 

FORM 8-K

 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

 

Date of report (Date of earliest event reported)            August 5, 2020

 

Hudson Technologies, Inc.

 

(Exact Name of Registrant as Specified in Charter)

 

New York

(State or Other Jurisdiction of Incorporation)

 

1-13412

13-3641539

(Commission File Number) (IRS Employer Identification No.)
 

PO Box 1541, 1 Blue Hill Plaza, Pearl River, New York

10965

(Address of Principal Executive Offices) (Zip Code)

 

(845) 735-6000

(Registrant's Telephone Number, Including Area Code)

 

Not Applicable

(Former Name or Former Address, if Changed Since Last Report)

  

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class Trading Symbols(s) Name of each exchange on which registered
Common Stock, $0.01 par value HDSN Nasdaq Capital Market

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

 

¨       Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

¨       Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

¨       Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

¨       Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

  

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

 

Emerging growth company ¨

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

 

 

 

 

 

 

Item 2.02Results of Operations and Financial Condition

 

On August 5, 2020, Hudson Technologies, Inc. (the “Company”) issued a press release announcing its financial results for the second quarter and six months ended June 30, 2020. A copy of the press release is furnished herewith as Exhibit 99.1.

 

Item 9.01Financial Statements and Exhibits.

 

(d) Exhibits

 

Exhibit 99.1Press Release issued August 5, 2020.

  

 

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SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

 

Date: August 5, 2020

 

  HUDSON TECHNOLOGIES, INC.
   
   
  By: /s/ Nat Krishnamurti
  Name:  Nat Krishnamurti
  Title:    Chief Financial Officer & Secretary

 

 

 

 3 

 

 

Exhibit 99.1

 

HUDSON TECHNOLOGIES REPORTS Second Quarter 2020 Net Income of $2.4 Million or $0.06 Per share

 

 

pearl river, ny – August 5, 2020 – Hudson Technologies, Inc. (NASDAQ: HDSN) announced results for the second quarter and six months ended June 30, 2020.

 

For the quarter ended June 30, 2020, Hudson reported revenues of $47.7 million, a decrease of 14.8% compared to revenues of $56.0 million in the comparable 2019 period. The decrease is primarily due to a decline in volume, partially offset by an increase in selling price, of certain refrigerants sold during the second quarter of 2020, compared to the second quarter of 2019. Gross margin in the second quarter of 2020 was 26.6%, compared to negative gross margin in the second quarter of 2019. The Company reported operating income of $5.2 million for the second quarter of 2020 compared to an operating loss of $10.0 million in the second quarter of 2019. During the second quarter of 2019 the Company recorded a lower of cost or net realizable value adjustment to its inventory of $9.2 million, mainly due to declines in selling prices of certain refrigerants at that time. The Company recorded net income of $2.4 million or $0.06 per basic and diluted share in the second quarter of 2020, compared to a net loss of $13.8 million or ($0.32) per basic and diluted share in the same period of 2019.

 

For the six months ended June 30, 2020, Hudson reported revenues of $84.0 million, a decrease of 7.4% compared to $90.7 million in the first six months of 2019. The decrease in revenue was primarily due to decreased volume, partially offset by increased pricing of certain refrigerants. Gross margin for the first six months of 2020 improved to 25.0% compared to gross margin of 5.1% in the first half of 2019. The Company reported operating income of $5.6 million for the first six months of 2020 compared to an operating loss of $9.7 million in the same period of 2019. The Company’s net loss for the first six months of 2020 was $0.5 million, or ($0.01) per basic and diluted share, compared to a net loss of $17.8 million, or ($0.42) per basic and diluted share, in the first half of 2019, which included the above mentioned $9.2 million non-cash inventory adjustment.

 

Brian F. Coleman, President and Chief Executive Officer of Hudson Technologies commented,

“We were pleased to deliver solid second quarter results, particularly as we continue to navigate the challenging landscape associated with the COVID-19 virus and the associated impact to our economy. During the quarter, the closures to public venues, such as office buildings, recreation centers, schools and universities across the U.S. impacted end markets and demand for refrigerants. While pricing remained consistent in the quarter, volume declines adversely impacted our overall revenues. Nonetheless, we delivered improved gross margin for the quarter, achieved solid operating income and returned to profitability.

 

“There are still many uncertainties associated with this pandemic and we remain focused on the elements of our business that we can control: protecting the health and safety of our employees and keeping our products in supply to best serve our customers across all channels. We’ve been in this business for more than thirty years, and our ability to adapt to changing economic and industry landscapes while executing our operational strategy is a strength we continue to rely upon. Despite the challenging market environment, Hudson generated over $6 million of operating cash flow during the second quarter of 2020. The Company’s financial position and liquidity remain strong, with total liquidity at June 30, 2020 of approximately $39 million, which includes cash and revolver availability. Finally, as announced in an 8-K this past Monday, we’ve met certain performance targets set forth in our Credit Agreement, and as a result of this achievement, we have terminated the services of our Chief Restructuring Officer.

 

 

 

 

“As you know, in late June, our Company suffered the unexpected loss of our founder Kevin J. Zugibe, P.E. He was an industry pioneer who brought remarkable passion, expertise and energy to Hudson, and he is greatly missed. In his years building the Company, Kevin recognized the importance of establishing a strong management team to drive and support Hudson’s growth. All of our employees are committed to continuing to grow and execute on Kevin’s legacy, and as one of Kevin’s longstanding partners for over 20 years, I can assure you that we are focused on our Company’s success as we move through the coming months and years,” Mr. Coleman concluded.

 

Conference Call Information

 

The Company will host a conference call and webcast to discuss the second quarter results today, August 5, 2020 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 (844) 407-9500 approximately five minutes prior to the scheduled start time. International callers please dial (862) 298-0850.

 

A replay of the teleconference will be available until September 4, 2020 and may be accessed by dialing (877) 481-4010. International callers may dial (919) 882-2331. Callers should use conference ID: 35826.

 

About Hudson Technologies

 

Hudson Technologies, Inc. is a leading provider of innovative and sustainable solutions for optimizing performance and enhancing reliability of commercial and industrial chiller plants and refrigeration systems. Hudson's proprietary RefrigerantSide® Services increase operating efficiency, provide energy and cost savings, reduce greenhouse gas emissions and the plant’s carbon footprint while enhancing system life and reliability of operations at the same time. RefrigerantSide® Services can be performed at a customer's site as an integral part of an effective scheduled maintenance program or in response to emergencies. Hudson also offers SMARTenergy OPS®, which is a cloud-based Managed Software as a Service for continuous monitoring, Fault Detection and Diagnostics and real-time optimization of chilled water plants. In addition, the Company sells refrigerants and provides traditional reclamation services for commercial and industrial air conditioning and refrigeration uses. 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 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, 2019 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)

 

   June 30,   December 31, 
   2020   2019 
   (unaudited)     
Assets          
Current assets:          
Cash and cash equivalents  $7,850   $2,600 
Trade accounts receivable – net   25,317    8,061 
Inventories – net   48,570    59,238 
Prepaid expenses and other current assets   3,622    4,525 
Total current assets   85,359    74,424 
           
Property, plant and equipment, less accumulated depreciation   22,108    23,674 
Goodwill   47,803    47,803 
Intangible assets, less accumulated amortization   24,580    26,012 
Right of use asset   7,205    8,048 
Other assets   180    192 
Total Assets  $187,235   $180,153 
           
Liabilities and Stockholders’ Equity          
Current liabilities:          
Trade accounts payable  $12,140   $10,274 
Accrued expenses and other current liabilities   19,985    18,120 
Accrued payroll   1,537    724 
Short-term debt   15,931    14,000 
Current maturities of long-term debt   5,743    3,008 
Total current liabilities   55,336    46,126 
Deferred tax liability   1,238    1,192 
Long-term lease liabilities   4,710    5,742 
Long-term debt, less current maturities   81,006    81,982 
Total Liabilities   142,290    135,042 
           
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 42,628,560 at June 30, 2020 and December 31, 2019   426    426 
Additional paid-in capital   117,890    117,557 
Accumulated deficit   (73,371)   (72,872)
Total Stockholders’ Equity   44,945    45,111 
           
Total Liabilities and Stockholders’ Equity  $187,235   $180,153 

  

 

 

 

Hudson Technologies, Inc. and Subsidiaries

Consolidated Statements of Operations

(unaudited)

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

 

   Three months
ended June 30,
   Six months
ended June 30,
 
   2020   2019   2020   2019 
Revenues  $47,677   $56,011   $84,027   $90,675 
Cost of sales   34,996    58,377    62,999    86,056 
Gross profit (loss)   12,681    (2,366)   21,028    4,619 
                     
Operating expenses:                    
Selling, general and administrative   6,757    6,848    14,022    12,872 
Amortization   716    753    1,432    1,474 
Total operating expenses   7,473    7,601    15,454    14,346 
                     
Operating income (loss)   5,208    (9,967)   5,574    (9,727)
                     
Other expense:                    
Net interest expense   (3,132)   (4,267)   (6,446)   (8,474)
Other income   8    508    11    508 
Total other expense   (3,124)   (3,759)   (6,435)   (7,966)
                     
Income (loss) before income taxes   2,084    (13,726)   (861)   (17,693)
                     
Income tax (benefit) expense   (302)   71    (362)   143 
                     
Net income (loss)  $2,386   $(13,797)  $(499)  $(17,836)
                     
Net income(loss) per common share – Basic  $0.06   $(0.32)  $(0.01)  $(0.42)
Net income(loss) per common share – Diluted  $0.06   $(0.32)  $(0.01)  $(0.42)
Weighted average number of shares outstanding – Basic   42,628,560    42,604,189    42,628,560    42,603,315 
Weighted average number of shares outstanding – Diluted   42,917,562    42,604,189    42,628,560    42,603,315