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HDSN 1.31 Hudson Technologies Reports Second Quarter 2007 Results Market Wire "US Press Releases "
PEARL RIVER, NY -- (MARKET WIRE) -- 08/02/07 -- Hudson Technologies, Inc. (NASDAQ: HDSN), a leading refrigerant services company specializing in proprietary on-site decontamination services for large comfort and process cooling systems, today announced results for the second quarter ended June 30, 2007 .
Revenues for the second quarter of 2007 were $11,307,000 , an increase of $2,504,000 or 28% from the $8,803,000 reported during the comparable 2006 period. Revenues for the six-month period ended June 30, 2007 were $19,424,000 , an increase of $3,715,000 or 24% from the $15,709,000 reported during the comparable 2006 period.
As a result of the previously announced stock purchase from the Fleming Funds, the Company incurred a $4,338,000 non-recurring, non-cash charge to compensation expense, which reduced its reported operating income and net income by such amount. Therefore, as a result of this non-recurring, non-cash charge, the Company reported a net loss for the second quarter of $1,615,000 , compared to $1,297,000 net income reported during the second quarter 2006. The net loss for the six-month period ended June 30, 2007 of $1,332,000 , which also gives effect to the $4,338,000 non-recurring, non-cash charge, compares to $1,544,000 net income reported during the comparable 2006 period. The Company also recognized in the second quarter an income tax benefit of $1,254,000 associated with its deferred tax asset. Without the non-recurring, non-cash charge of $4,338,000 , the Company would have reported an increase in operating income and net income for the three and six months ended June 30, 2007 over the comparable 2006 periods.
Comments by Kevin J. Zugibe, chairman and chief executive officer, Hudson Technologies:
"Operationally, the second quarter of 2007 was one of the Company's strongest quarters ever. Total revenues in the second quarter of 2007 exceeded $11 million , representing the highest quarterly revenues in our history. Refrigerant sales in the second quarter of 2007 increased by more than $2,500,000 over the 2006 period, marking three years of double digit revenue growth, which we attribute largely to our efforts to expand our sales capability. RefrigerantSide® Services revenues were just slightly lower than last year's second quarter due to a slight reduction in the number of jobs completed.
"The second quarter of 2007 was not only a strong sales quarter, but also a quarter in which we took significant steps to return value to Hudson shareholders. As previously reported, on June 28, 2007 , Fleming U.S. Discovery Fund III, L.P. and Fleming U.S. Offshore Discovery Fund III, L.P. ("Fleming Funds") sold 14,911,600 shares of Hudson's common stock in a series of transactions involving the Company and certain members of the Company's management. Hudson purchased and retired 5,680,800 of those shares and certain members of the Company's management team in separate private transactions purchased 9,230,800 of those shares. As a consequence of the sale by the Fleming Funds to the management team of 9,230,800 shares at a purchase price below the then current market price, the Company was required to record non-cash compensation expense of $4,338,000 and a corresponding increase to additional paid-in capital. The Company's net worth was unaffected by this non-recurring, non-cash charge. As a result of these transactions, and after the Company completes its previously announced additional purchase of 1,167,400 shares, the Company will have reduced the number of outstanding shares by more than 26%.
"Certain members of Hudson's management team in the aggregate have personally invested approximately $6,000,000 to purchase 9,230,800 shares of unregistered common stock in the Company from the Fleming Funds. Management did not receive registration rights for these unregistered shares, which, under current regulations are, among other things, restricted from public sale for a minimum of one year from the date of purchase. These transactions, involving the significant personal investment made by our management, reflect the management team's confidence in the future of Hudson Technologies.
"Momentum continues to build as we execute on our vision for continued growth with an expanded sales capability, differentiated offerings and an aggressive share buyback to return value to our shareholders."
Conference Call Information
The Company will host a conference call to discuss the second-quarter 2007 results and additional matters on August 2, 2007 at 1:00 P.M. Eastern.
To listen to the conference call, dial 866-296-6505. Callers should please call at least ten minutes prior to the scheduled start time and verbally give the operator the following access code: 7045414.
An audio replay of the call will be available beginning August 2, 2007 at 4:00 P.M. Eastern for one week through August 9, 2007 , and can be accessed by dialing 877-528-4487 and using the following access code: 63143288#.
A web stream replay of the call will be available for 30 days through September 1, 2007 at the following link: http://app.replayrecorder.com/budget?replaycode=63143288.
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.

Hudson Technologies, Inc. and subsidiaries
Consolidated Statements of Operations
(unaudited)
(Amounts in thousands, except for share and per share amounts)


Three-month period Six-month period
---------------------- ----------------------
ended June 30, ended June 30,
---------------------- ----------------------
2007 2006 2007 2006
---------- ---------- ---------- ----------

Revenues $ 11,307 $ 8,803 $ 19,424 $ 15,709
Cost of sales 8,358 6,215 14,917 11,395
---------- ---------- ---------- ----------
Gross Profit 2,949 2,588 4,507 4,314
---------- ---------- ---------- ----------

Operating expenses:
Selling and marketing 480 403 888 849
General and
administrative 836 799 1,573 1,726
Compensation expense for
stock purchases 4,338 ------ 4,338 ------
---------- ---------- ---------- ----------
Total operating
expenses 5,654 1,202 6,799 2,575
---------- ---------- ---------- ----------

Operating income (loss) (2,705) 1,386 (2,292) 1,739
---------- ---------- ---------- ----------

Other income (expense):
Interest expense (167) (85) (306) (188)
Interest income 3 4 12 6
---------- ---------- ---------- ----------
Total other income
(expense) (164) (81) (294) (182)
---------- ---------- ---------- ----------


Income (loss) before income
taxes (2,869) 1,305 (2,586) 1,557

Income taxes (benefit) (1,254) 8 (1,254) 13
---------- ---------- ---------- ----------

Net income (loss) ($ 1,615) $ 1,297 ($ 1,332) $ 1,544
========== ========== ========== ==========

Net income (loss) per
common share - basic and
diluted ($ 0.06) $ 0.05 ($ 0.05) $ 0.06
========== ========== ========== ==========
Weighted average number of
shares outstanding - Basic 25,905,060 25,893,907 25,910,233 25,893,207
========== ========== ========== ==========

Weighted average number of
shares outstanding -
Diluted 25,905,060 26,273,210 25,910,233 26,370,126
========== ========== ========== ==========