HUDSON TECHNOLOGIES INC NY
For the period ended Sep 30, 2024. Filed Nov 8, 2024.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2024 · Filed Nov 8, 2024
HDSN$4.18+2.2%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-06-30; filed 2024-08-09.
0001410578-24-001274
Item 2. - Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-09-30; filed 2024-11-08.
0001410578-24-001834
Item 2. - Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 71 previous paragraphs and 74 current paragraphs.
45 unchanged; 25 reworded; 4 added; 1 removed; 0 previous and 0 current paragraphs rearranged.
Tables are not compared: 0 previous and 0 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (4)
Current report
Other income for the three-month period ended September 30, 2024 was $2.3 million. This amount includes proceeds from a litigation settlement of $1.8 million and $0.5 million from the lease opt-out related to the Atlanta facility lease.
Current report
Revenues for the nine month period ended September 30, 2024 were $202.5 million, a decrease of $41.7 million or 17% from the $244.2 million reported during the comparable 2024 period. The decrease was primarily attributable to lower selling prices which decreased by 18% offset by 2% higher volume of refrigerants sold.
Current report
Other income for the nine-month period ended September 30, 2024 was $2.3 million. This amount includes proceeds from a litigation settlement of $1.8 million and $0.5 million from the lease opt-out related to the Atlanta facility lease.
Current report
On October 23, 2024, the Borrowers and the Company entered into a Second Amendment to Amended and Restated Credit Agreement dated October 23, 2024 (the “Second Amendment”) with Wells Fargo and the lenders under the Amended Wells Fargo Facility. The Second Amendment amends the provision relating to permitted stock repurchases by the Company, to permit stock repurchases in an amount not to exceed $10 million per calendar year in each of 2024 and 2025 and $5 million in any calendar year thereafter during the term of the Amended Wells Fargo Facility, upon satisfaction of certain conditions, subject to an aggregate cap of $25 million.
Removed paragraphs (1)
Previous report
Revenues for the six month period ended June 30, 2024 were $140.5 million, a decrease of $27.2 million or 16% from the $167.7 million reported during the comparable 2024 period. The decrease was attributable to both lower selling prices and volume of certain refrigerants sold.
Reworded paragraphs (25)
Previous wording
There were no goodwill impairment losses recognized in 2023 or the six months ended June 30, 2024.
Current wording
There were no goodwill impairment losses recognized in 2023 or the nine months ended September 30, 2024.
Previous wording
On June 6, 2024, the Company’s subsidiary Hudson Technologies Company completed the acquisition of substantially all the business assets of USA United Suppliers of America, Inc. (d/b/a USA Refrigerants) (“USA Refrigerants”) and B&B Jobber Services, Inc. (collectively, the “USA Refrigerants Acquisition”). The consideration for the USA Refrigerants Acquisition was approximately $20.7 million in cash, paid at the closing, subject to customary escrow holdbacks and inventory adjustments, and also provides for a further contingent payment of up to $2.0 million payable, to the extent earned, approximately 18 months from the closing date.
Current wording
On June 6, 2024, the Company’s subsidiary Hudson Technologies Company completed the acquisition of substantially all the business assets of USA United Suppliers of America, Inc. (d/b/a USA Refrigerants) (“USA Refrigerants”) and B&B Jobber Services, Inc. (collectively, the “USA Refrigerants Acquisition”). The consideration for the USA Refrigerants Acquisition was approximately $20.7 million in cash, paid at the closing, and provides for a further contingent payment of up to $2.0 million payable, to the extent earned, approximately 18 months from the closing date.
Previous wording
Revenues for the three-month period ended June 30, 2024 were $75.3 million, a decrease of $15.2 million or 17% from the $90.5 million reported during the comparable 2023 period. The decrease was primarily attributable to lower selling prices of certain refrigerants sold.
Current wording
Revenues for the three-month period ended September 30, 2024 were $61.9 million, a decrease of $14.6 million or 19% from the $76.5 million reported during the comparable 2023 period. The decrease was primarily attributable to 14% lower selling prices and 7% lower volume of refrigerants sold.
Previous wording
Cost of sales for the three-month period ended June 30, 2024 was $52.7 million or 70% of sales. The cost of sales for the three-month period ended June 30, 2023 was $53.8 million or 59% of sales. The increase in the cost of sales percentage from 59% to 70% is primarily due to higher cost of sales during the second quarter of 2024, driven by the sale of inventory held at higher price and corresponding reduction in sales price of refrigerants.
Current wording
Cost of sales for the three-month period ended September 30, 2024 was $46.0 million or 74% of sales. The cost of sales for the three-month period ended September 30, 2023 was $45.9 million or 60% of sales. The increase in the cost of sales percentage from 60% to 74% is primarily due to higher cost of sales during the third quarter of 2024, driven by the sale of inventory held at higher price and corresponding reduction in sales price of refrigerants.
Previous wording
Selling, general and administrative (“SG&A”) expenses for the three-month period ended June 30, 2024 were $9.0 million, an increase of $0.7 million from the $8.3 million reported during the comparable 2023 period due to an increase in personnel costs, professional fees, IT Expenses and acquisition costs, with approximately $0.7 million considered non-recurring charges.
Current wording
Selling, general and administrative (“SG&A”) expenses for the three-month period ended September 30, 2024 were $8.1 million, an increase of $1.3 million from the $6.8 million reported during the comparable 2023 period due to an increase in personnel costs and professional fees.
Previous wording
Amortization expense for the three-month periods ended June 30, 2024 and 2023 was $0.8 million and $0.7 million, respectively.
Current wording
Amortization expense for the three-month periods ended September 30, 2024 and 2023 was $0.9 million and $0.7 million, respectively.
Previous wording
Interest expense for the six-month period ended June 30, 2024 was $0.4 million, compared to the $3.7 million reported during the comparable 2023 period. During the third quarter of 2023, the Company repaid in full the remaining $32.5 million principal balance outstanding under its term loan facility.
Current wording
Interest expense (income) for the three-month period ended September 30, 2024 was ($0.3) million compared to the $4.4 million of interest expense reported during the comparable 2023 period. During the third quarter of 2023, the Company repaid in full the remaining $32.5 million principal balance outstanding under its term loan facility. In conjunction with this payoff, the Company recorded a non-cash write off of $3.1 million of deferred financing costs in the third quarter of 2023.
Previous wording
The income tax expense for the three-month period ended June 30, 2024 was $3.1 million compared to income tax expense of $6.6 million for the three month period ended June 30, 2023. Income tax expense for federal and state income tax purposes was determined by applying statutory income tax rates to pre-tax income after adjusting for certain items.
Current wording
The income tax expense for the three-month period ended September 30, 2024 was $1.7 million compared to income tax expense of $5.2 million for the three month period ended September 30, 2023. Income tax expense for federal and state income tax purposes was determined by applying statutory income tax rates to pre-tax income after adjusting for certain items.
Previous wording
The net income for the three-month period ended June 30, 2024 was $9.6 million, a decrease of $9.6 million from the $19.2 million of net income reported during the comparable 2023 period, primarily due to lower sale prices of certain refrigerant sold and higher SG&A costs, as described above.
Current wording
The net income for the three-month period ended September 30, 2024 was $7.8 million, a decrease of $5.8 million from the $13.6 million of net income reported during the comparable 2023 period, primarily due to lower sale prices of certain refrigerant sold and higher SG&A costs, as described above.
Previous wording
Six month period ended June 30, 2024 as compared to the six month period ended June 30, 2023
Current wording
Nine month period ended September 30, 2024 as compared to the nine month period ended September 30, 2023
Previous wording
Cost of sales for the six-month period ended June 30, 2024 was $96.5 million or 69% of sales. The cost of sales for the six-month period ended June 30, 2023 was $100.7 million or 60% of sales. The increase in the cost of sales percentage from 60% to 69% is primarily due to higher cost of sales during the first half of 2024, driven by the sale of inventory held at higher price and corresponding reduction in sales price of refrigerants.
Current wording
Cost of sales for the nine-month period ended September 30, 2024 was $142.5 million or 70% of sales. The cost of sales for the nine-month period ended September 30, 2023 was $146.6 million or 60% of sales. The increase in the cost of sales percentage from 60% to 70% is primarily due to higher cost of sales during the first nine months of 2024, driven by the sale of inventory held at higher price and corresponding reduction in sales price of refrigerants.
Previous wording
Selling, general and administrative (“SG&A”) expenses for the six-month period ended June 30, 2024 were $17.0 million, an increase of $1.7 million from the $15.3 million reported during the comparable 2023 period. The increase in SG&A was primarily due to increased headcount, professional fees, IT Expenses and acquisition costs with approximately $0.7 million considered non-recurring charges.
Current wording
Selling, general and administrative (“SG&A”) expenses for the nine-month period ended September 30, 2024 were $25.0 million, an increase of $3.0 million from the $22.0 million reported during the comparable 2023 period. The increase in SG&A was primarily due to increased personnel cost, professional fees, IT Expenses and acquisition costs with approximately $0.7 million considered non-recurring charges.
Previous wording
Amortization expense for the six-month periods ended June 30, 2024 and 2023 was $1.5 million and $1.4 million, respectively.
Current wording
Amortization expense for the nine-month periods ended September 30, 2024 and 2023 was $2.4 million and $2.1 million, respectively.
Previous wording
Interest expense for the three-month period ended June 30, 2024 was $0.2 million, compared to the $1.9 million reported during the comparable 2023 period. During the third quarter of 2023, the Company repaid in full the remaining $32.5 million principal balance outstanding under its term loan facility.
Current wording
Interest expense (income) for the nine-month period ended September 30, 2024 was ($0.1) million, compared to the $8.1 million reported during the comparable 2023 period. During the third quarter of 2023, the Company repaid in full the remaining $32.5 million principal balance outstanding under its term loan facility.
Previous wording
The income tax expense for the six-month period ended June 30, 2024 was $6.1 million compared to income tax expense of $11.8 million for the six-month period ended June 30, 2023. Income tax expense for federal and state income tax purposes was determined by applying statutory income tax rates to pre-tax income after adjusting for certain items.
Current wording
The income tax expense for the nine-month period ended September 30, 2024 was $7.8 million compared to income tax expense of $17.0 million for the nine-month period ended September 30, 2023. Income tax expense for federal and state income tax purposes was determined by applying statutory income tax rates to pre-tax income after adjusting for certain items.
Previous wording
Net income for the six-month period ended June 30, 2024 was $19.1 million, a decrease of $15.6 million from the $34.7 million of net income reported during the comparable 2023 period, primarily due to lower sale price of certain refrigerant sold and higher SG&A costs, as described above.
Current wording
Net income for the nine-month period ended September 30, 2024 was $27.0 million, a decrease of $21.3 million from the $48.3 million of net income reported during the comparable 2023 period, primarily due to lower sale price of certain refrigerant sold and higher SG&A costs, as described above.
Previous wording
At June 30, 2024, the Company had working capital, which represents current assets less current liabilities, of $152.3 million, an increase of $5.9 million from the working capital of $146.4 million at December 31, 2023. The increase in working capital is primarily attributable to continued profitability and the timing of borrowings, accounts receivable and inventory.
Current wording
At September 30, 2024, the Company had working capital, which represents current assets less current liabilities, of $156.9 million, an increase of $10.5 million from the working capital of $146.4 million at December 31, 2023. The increase in working capital is primarily attributable to accounts receivable and inventory.
Previous wording
Inventories and trade receivables are principal components of current assets. At June 30, 2024, the Company had inventories of $123.7 million, a decrease of $30.8 million from $154.5 million at December 31, 2023. The Company’s ability to sell and replace its inventory on a timely basis and the prices at which it can be sold are subject, among other things, to current market conditions and the nature of supplier or customer arrangements and the Company’s ability to source CFC and HCFC based refrigerants (which are no longer being produced) and HFC refrigerants (virgin production currently in the process of being phased down) and HFO refrigerants.
Current wording
Inventories and trade receivables are principal components of current assets. At September 30, 2024, the Company had inventories of $103.5 million, a decrease of $51.0 million from $154.5 million at December 31, 2023. The Company’s ability to sell and replace its inventory on a timely basis and the prices at which it can be sold are subject, among other things, to current market conditions and the nature of supplier or customer arrangements and the Company’s ability to source CFC and HCFC based refrigerants (which are no longer being produced) and HFC refrigerants (virgin production currently in the process of being phased down) and HFO refrigerants.
Previous wording
At June 30, 2024, the Company had trade receivables, net of allowance for credit losses, of $30.3 million, an increase of $5.1 million from $25.2 million at December 31, 2023, mainly due to seasonal timing. The Company typically generates its most significant revenue during the second and third quarters of any given year. The Company’s trade receivables are concentrated with various wholesalers, brokers, contractors and end-users within the refrigeration industry that are primarily located in the continental United States. The Company has historically financed its working capital requirements through cash flows from operations, debt, and the issuance of equity securities.
Current wording
At September 30, 2024, the Company had trade receivables, net of allowance for credit losses, of $28.5 million, an increase of $3.3 million from $25.2 million at December 31, 2023, mainly due to seasonal timing. The Company typically generates its most significant revenue during the second and third quarters of any given year. The Company’s trade receivables are concentrated with various wholesalers, brokers, contractors and end-users within the refrigeration industry that are primarily located in the continental United States. The Company has historically financed its working capital requirements through cash flows from operations, debt, and the issuance of equity securities.
Previous wording
Net cash provided by operating activities for the six-month period ended June 30, 2024 was $40.8 million, when compared to net cash provided by operating activities of $21.2 million for the comparable 2023 period. As discussed above, selling prices of certain refrigerants declined in 2024. The increase is largely due to the recent acquisition of USA Refrigerants. Another contributory factor was the timing of accounts receivable, accounts payable and accrued expenses.
Current wording
Net cash provided by operating activities for the nine-month period ended September 30, 2024 was $71.1 million, when compared to net cash provided by operating activities of $43.5 million for the comparable 2023 period. As discussed above, selling prices of certain refrigerants declined in 2024. The increase is largely due to the recent acquisition of USA Refrigerants. Another contributory factor was the timing of accounts receivable, accounts payable and accrued expenses.
Previous wording
Net cash used in investing activities for the six-month period ended June 30, 2024 was $22.8 million compared with net cash used in investing activities of $0.8 million for the comparable 2023 period, mainly due to the recent acquisition of USA Refrigerants as previously discussed and timing of capital expenditures related to capitalization of its ERP system.
Current wording
Net cash used in investing activities for the nine-month period ended September 30, 2024 was $24.4 million compared with net cash used in investing activities of $2.2 million for the comparable 2023 period, mainly due to the recent acquisition of USA Refrigerants as previously discussed and timing of capital expenditures related to capitalization of its ERP system.
Previous wording
Net cash used in financing activities for the six-month period ended June 30, 2024 was $0.0 million compared with net cash used in financing activities of $14.3 million for the comparable 2023 period.
Current wording
Net cash used in financing activities for the nine-month period ended September 30, 2024 was $2.6 million compared with net cash used in financing activities of $42.8 million for the comparable 2023 period. The change is primarily because in 2023, the Company paid off $42.8 million of its debt as compared to no debt in 2024. During the quarter ended September 30, 2024, the Company repurchased 326,028 shares, totaling $2.6 million.
Previous wording
At June 30, 2024, cash and cash equivalents were $30.5 million, or approximately $18.1 million higher than the $12.4 million of cash and cash equivalents at December 31, 2023.
Current wording
At September 30, 2024, cash and cash equivalents were $56.5 million, or approximately $44.1 million higher than the $12.4 million of cash and cash equivalents at December 31, 2023.
Previous wording
On June 6, 2024, the Borrowers and the Company entered into a First Amendment to Amended and Restated Credit Agreement and Limited Consent (the “First Amendment”) with Wells Fargo and the lenders under the Amended Wells Fargo Facility. Pursuant to the First Amendment, Wells Fargo and the other lenders consented to the consummation of the USA Refrigerants Acquisition and made certain other technical amendments to the existing Amended Wells Fargo Facility, including the calculation of the borrowing base thereunder. The First Amendment also provides for permitted stock repurchases by the Company in an amount not to exceed $5 million per calendar year, and $15 million in aggregate over the term of the Amended Wells Fargo Facility, upon satisfaction of certain conditions.
Current wording
On June 6, 2024, the Borrowers and the Company entered into a First Amendment to Amended and Restated Credit Agreement and Limited Consent (the “First Amendment”) with Wells Fargo and the lenders under the Amended Wells Fargo Facility. Pursuant to the First Amendment, Wells Fargo and the other lenders consented to the consummation of the USA Refrigerants Acquisition and made certain other technical amendments to the existing Amended Wells Fargo Facility, including the calculation of the borrowing base thereunder. The First Amendment also provided for permitted stock repurchases by the Company in an amount not to exceed $5 million per calendar year, and $15 million in aggregate over the term of the Amended Wells Fargo Facility, upon satisfaction of certain conditions.
Previous wording
For the six month period ended June 30, 2024 there was one customer accounting for greater than 10% of the Company’s revenues and at June 30, 2024 there were $3.7 million of accounts receivable from this customer. For the six month period ended June 30, 2023 there was one customer accounting for greater than 10% of the Company’s revenues and at June 30, 2023 there were $14.6 million of accounts receivable from this customer.
Current wording
For the nine month period ended September 30, 2024 there was one customer accounting for greater than 10% of the Company’s revenues and at September 30, 2024 there were $4.9 million of accounts receivable from this customer. For the nine month period ended September 30, 2023 there was one customer accounting for greater than 10% of the Company’s revenues and at September 30, 2023 there were $19.7 million of accounts receivable from this customer.