In the company’s news yesterday,
Hudson Technologies Inc. (Nasdaq: HDSN) posted its financial results for the third quarter and nine months ended September 30, 2008, reporting an increase in revenues and operating income for both time periods.
For the third quarter of 2008, Hudson reported revenues at $5.8 million, up 23 percent from $4.3 million for the same quarter in 2007. The company attributes this to a rise in sales price and pounds of refrigerant sold, as well as anticipation of a federal mandated phase out for new HCFC production in 2010.
“This phase out will limit and ultimately ban production of virgin HCFC refrigerants, while allowing for re-use, through reclamation, of HCFC refrigerants in order to meet the industry’s service needs for decades to come. As production of virgin HCFC refrigerants declines and eventually ends, the demand for reclaimed HCFC refrigerants is expected to increase. Large process and comfort cooling systems that require HCFCs to function efficiently are expensive pieces of equipment with service lives of 20 years or more,” Kevin J. Zugibe, chairman and CEO of Hudson stated in the press release.
Operating income for the third quarter rose 9 percent to $642,000 as compared to $591,000 in the quarter same quarter last year; net income for the third quarter of 2008, including an income tax benefit of $2.3 million, was $2.7 million, or 14 cents per basic common share, as compared to $357,000, or 2 cents per basic common share reported for the same period of 2007.
For the nine months ended September 30, 2008, the company posted revenues of $30.2 million, up 25 percent from the $24.1 million posted for the nine month period of 2007.
Gross profit margins for the period increased to 35 percent from 25 percent; and operating income for the nine months was $6.5 million, up from an operating loss of $1.7 million in the nine months ended September 30, 2007; net income for the first nine months of 2008 was $7.4 million, or 39 cents per basic common share, versus a loss of $975,000, or 4 cents per basic common share in the first nine months of 2007.
Zugibe said that in the midst of our current economic environment, users and operators of cooling systems are expected to extend the demand for reclaimed refrigerant, just like the previous phase out.
“As we saw during the CFC phase out in the 1990s, we have every reason to believe that refrigerant prices will continue to rise and that the demand for refrigerant reclamation and for reclaimed refrigerant will grow. We believe that the overall market and, therefore, the opportunity relative to HCFC refrigerants is more that twice the market opportunity that existed with the CFC phase out,” he stated.
“We are already observing the industry’s reaction to the impending HCFC phase out in the form of significant increases in the price of HCFC refrigerants and heightened demand for our reclamation services. These increases have resulted in higher revenues and strong earnings for our business, which has allowed us to invest our cash flow to support our anticipated double digit revenue growth for the foreseeable future,” Zugibe stated. “The reclamation industry is very fragmented and some amount of consolidation is likely in the years to come. Hudson is one of, if not the largest reclamation company, and we believe that we have the opportunity to further expand our business as demand for reclamation and reclaimed refrigerants grows.”
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Forward-Looking Statement:
This release may contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All forward-looking statements are inherently uncertain as they are based on current expectations and assumptions concerning future events or future performance of the company. Readers are cautioned not to place undue reliance on these forward-looking statements, which are only predictions and speak only as of the date hereof. Risks and uncertainties applicable to the company and its business could cause the company's actual results to differ materially from those indicated in any forward-looking statements.
