HUDSON TECHNOLOGIES INC NY
For the period ended Dec 31, 2024. Filed Mar 12, 2025.
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A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2024 · Filed Mar 12, 2025
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-K
Period ended 2023-12-31; filed 2024-03-14.
0001410578-24-000199
Item 7. -Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-K
Period ended 2024-12-31; filed 2025-03-12.
0001410578-25-000323
Item 7. -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 65 previous paragraphs and 63 current paragraphs.
34 unchanged; 21 reworded; 7 added; 9 removed; 1 previous and 1 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 (7)
Current report
Recent Acquisition
Current report
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.
Current report
USA Refrigerants is a leading refrigerant distributor and distributes, reclaims and packages refrigerant gases for a variety of end uses. Potential benefits of the USA Refrigerants Acquisition include (i) providing a broader customer network which will provide the Company with increased access to refrigerant for reclamation and strengthen the Company’s refrigerant distribution capabilities; (ii) adding incremental access to recovered pounds of refrigerants for sale for future periods to support the growth in reclamation; and (iii) enhancing the Company’s geographic footprint in the United States.
Current report
Amortization expense for the year ended December 31, 2024 was $3.4 million, an increase of $0.6 million from $2.8 million reported during the comparable 2023 period. The increase in amortization was primarily due to the recent acquisition of USA Refrigerants as described above.
Current report
Other income for the year ended December 31, 2024 was $2.3 million. This amount includes proceeds from litigation settlement of $1.8 million and $0.5 million from the lease opt-out related to the Smyrna, Georgia facility lease.
Current report
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.
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 (9)
Previous report
Goodwill
Previous report
The Company has made acquisitions that included a significant amount of goodwill and other intangible assets. The Company applies the purchase method of accounting for acquisitions, which among other things, requires the recognition of goodwill (which represents the excess of the purchase price of the acquisition over the fair value of the net assets acquired and identified intangible assets). We test our goodwill for impairment on an annual basis (the first day of the fourth quarter) and between annual tests if an event occurs or circumstances change that would more likely than not reduce the fair value of an asset below its carrying value. Other intangible assets that meet certain criteria are amortized over their estimated useful lives.
Previous report
An impairment charge is recorded based on the excess of a reporting unit’s carrying amount over its fair value. An impairment charge would be recognized when the carrying amount exceeds the estimated fair value of a reporting unit. These impairment evaluations use many assumptions and estimates in determining an impairment loss, including certain assumptions and estimates related to future earnings. If the Company does not achieve its earnings objectives, the assumptions and estimates underlying these impairment evaluations could be adversely affected, which could result in an asset impairment charge that would negatively impact operating results.
Previous report
There were no goodwill impairment losses recognized in any of the three years ended December 31, 2023, 2022 and 2021.
Previous report
Amortization expense was $2.8 million during 2023 and 2022, respectively.
Previous report
Termination of Prior Term Loan Facility
Previous report
In conjunction with entry into the new Term Loan Facility as described above, on March 2, 2022 the Company’s then-existing term loans, as amended (the “Prior Term Loan Facility”), which had a principal balance of approximately $63.9 million after payment of a $16.0 million excess cash flow amount thereunder, were repaid in full, together with associated required lender fees and expenses of $3.3 million, and the Prior Term Loan Facility was terminated. The termination of the Prior Term Loan Facility constituted an extinguishment of debt, which resulted in the Company recording an additional $4.6 million of interest expense during the first quarter of 2022, which included the aforementioned $3.3 million of prior lender fees and expenses and $1.3 million of pre-existing deferred financing costs from the Prior Term Loan Facility.
Previous report
CARES Act Loan
Previous report
On April 23, 2020 the Company received a loan in the amount of $2.475 million from Meridian Bank under the Paycheck Protection Program (“PPP”) pursuant to the CARES Act. The loan had a term of two years, was unsecured, and bore interest at a fixed rate of one percent per annum, with the first nine months of principal and interest deferred. As a result of the COVID-19 pandemic, in applying for the loan the Company made a good faith assertion based upon the degree of uncertainty introduced to the capital markets and the industries affecting the Company’s customers and the Company’s dependency to curtail expenses to fund ongoing operations. The PPP loan proceeds were used in part to help offset payroll costs as stipulated in the legislation. All or a portion of the PPP loan could be forgiven by the U.S. Small Business Administration (“SBA”) upon application by the Company and upon documentation of expenditures in accordance with the SBA requirements. Under the CARES Act, loan forgiveness is available for the sum of documented payroll costs and other covered areas, such as rent payments, mortgage interest and utilities, as applicable. During the third quarter of 2021, the Company received forgiveness of the loan from the SBA, resulting in $2.475 million of Other income recorded in the Company’s Consolidated Income Statements.
Reworded paragraphs (21)
Previous wording
The Company’s products and services are primarily used in commercial air conditioning, industrial processing and refrigeration systems, and include refrigerant and industrial gas sales, refrigerant management services consisting primarily of reclamation of refrigerants and RefrigerantSide® Services performed at a customer’s site, consisting of system decontamination to remove moisture, oils and other contaminants.
Current wording
The Company’s products and services are primarily used in commercial air conditioning, industrial processing and refrigeration systems, and include refrigerant and industrial gas sales, refrigerant management services consisting primarily of reclamation of refrigerants and
Previous wording
Revenues for the year ended December 31, 2023 were $289.0 million, a decrease of $36.2 million or 11% from the $325.2 million reported during the comparable 2022 period. The decrease was mainly attributable to lower selling prices of certain refrigerants sold, partially offset by increase in revenues from our DLA and carbon credit programs.
Current wording
Revenues for the year ended December 31, 2024 were $237.1 million, a decrease of $51.9 million or 18% from the $289.0 million reported during the comparable 2023 period. The decrease was primarily attributable to lower selling prices of certain refrigerants sold.
Previous wording
Cost of sales for the year ended December 31, 2023 was $177.5 million or 61% of sales. Cost of sales for the year ended December 31, 2022 was $162.3 million or 50% of sales. The increase in the cost of sales percentage from 61% to 50% is primarily due to the lower selling prices of certain refrigerants sold, as described above.
Current wording
Cost of sales for the year ended December 31, 2024 was $171.4 million or 72% of sales. Cost of sales for the year ended December 31, 2023 was $177.5 million or 61% of sales. The increase in the cost of sales percentage from 61% to 72% is primarily due to lower revenue as a result of lower selling prices of certain refrigerants, as well as the impact of additional inventory reserve.
Previous wording
Selling, general and administrative (“SG&A”) expenses for the year ended December 31, 2023 were $30.5 million, an increase of $1.9 million from the $28.6 million reported during the comparable 2022 period. The increase in SG&A was primarily due to an increased number of employees and stock compensation.
Current wording
Selling, general and administrative (“SG&A”) expenses for the year ended December 31, 2024 were $33.0 million, an increase of $2.5 million from the $30.5 million reported during the comparable 2023 period. The increase in SG&A was primarily due to increased personnel cost, professional fees and acquisition costs with approximately $0.7 million considered non-recurring charges.
Previous wording
Other expense for 2023 was $8.4 million, compared to the $14.3 million of other expense reported during the comparable 2022 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 $3.4 million of deferred financing costs. Similarly, during the first quarter of 2022, the Company recorded a non-cash write off of $4.7 million of deferred financing cost. Excluding these write offs, total interest expense for the year 2023 decreased by $4.7 million from the comparable 2022 period.
Current wording
Interest expense (income) was ($0.5) million, compared to the $8.4 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
Income tax expense for 2023 was $17.6 million compared to income tax expense of $13.4 million for 2022. The key drivers of increased income tax expense are the reversal of valuation allowance during 2022 for federal NOLs that were fully utilized and can no longer reduce taxable income. 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
Income tax expense for 2024 was $7.6 million compared to income tax expense of $17.6 million for 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 year ended December 31, 2023 was $52.2 million, a decrease of $51.6 million from the $103.8 million of net income reported during the comparable 2022 period, primarily due to lower revenues, higher cost of sales and a higher tax rate, as described above.
Current wording
Net income for the year ended December 31, 2024 was $24.4 million, a decrease of $27.8 million from the $52.2 million of net income reported during the comparable 2023 period, primarily due to lower sales prices of certain refrigerants sold, and higher SG&A costs, as described above.
Previous wording
Management’s discussion and analysis of the year ended December 31, 2022 as compared to the year ended December 31, 2021 is contained in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 14, 2023.
Current wording
Management’s Discussion and Analysis of Financial Condition and Results of Operations for the year ended December 31, 2023 as compared to the year ended December 31, 2022 is contained in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 14, 2024.
Previous wording
At December 31, 2023, the Company had working capital, which represents current assets less current liabilities, of $146.4 million, an increase of $22.2 million from the working capital of $124.2 million at December 31, 2022. The increase in working capital is primarily attributable to continued profitability and the timing of borrowings, accounts receivable and inventory.
Current wording
At December 31, 2024, the Company had working capital, which represents current assets less current liabilities, of $147.7 million, an increase of $1.3 million from the working capital of $146.4 million at December 31, 2023. The increase in working capital is primarily attributable to a rise in cash.
Previous wording
Inventory and trade receivables are principal components of current assets. At December 31, 2023, the Company had inventory of $154.5 million, an increase of $9.1 million from $145.4 million at December 31, 2022. 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
Inventory and trade receivables are principal components of current assets. At December 31, 2024, the Company had inventory of $96.2 million, a decrease of $58.3 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 December 31, 2023, the Company had trade receivables, net of credit losses, of $25.2 million, an increase of $4.3 million from $20.9 million at December 31, 2022, mainly due to 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 December 31, 2024, the Company had trade receivables, net of credit losses, of $13.6 million, a decrease of $11.6 million from $25.2 million at December 31, 2023, mainly due to timing. 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 year ended December 31, 2023 was $58.5 million, when compared to the net cash provided by operating activities of $62.8 million for the comparable 2022 period. As discussed above, selling prices of certain refrigerants declined in 2023. Another contributory factor was the timing of accounts receivable and inventory balances.
Current wording
Net cash provided by operating activities for the year ended December 31, 2024 was $91.8 million, when compared to the net cash provided by operating activities of $58.5 million for the comparable 2023 period. The increase is due to timing of accounts receivable, accounts payable and accrued expenses.
Previous wording
Net cash used in investing activities for 2023 was $3.6 million when compared to the net cash used in investing activities of $3.7 million for the comparable 2022 period.
Current wording
Net cash used in investing activities for 2024 was $26.0 million when compared to the net cash used in investing activities of $3.6 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 the Company’s ERP system.
Previous wording
Net cash used in financing activities for 2023 was $47.8 million, compared with net cash used in financing activities of $57.4 million for 2022. The Company refinanced its term loan debt during the first quarter of 2022, as described below, and paid off its remaining $32.5 million term loan debt during the third quarter of 2023.
Current wording
Net cash used in financing activities for 2024 was $8.2 million, compared with net cash used in financing activities of $47.8 million for 2023. The change is primarily because in 2023, the Company paid off $47.2 million of its debt as compared to no debt repayment in 2024. During the year 2024, the Company repurchased 1,244,076 shares of its common stock, at a cost of $8.1 million.
Previous wording
At December 31, 2023, cash and cash equivalents were $12.4 million, or approximately $7.1 million higher than the $5.3 million of cash and cash equivalents at December 31, 2022.
Current wording
At December 31, 2024, cash and cash equivalents were $70.1 million, or approximately $57.7 million higher than the $12.4 million of cash and cash equivalents at December 31, 2023.
Previous wording
The Company evaluated the Amended Wells Fargo Facility in accordance with the provisions of ASC 470-50 to determine if the amendment was a modification or an extinguishment of debt and concluded that the amendment was a modification of the original revolving credit facility for accounting purposes. As a result, the Company capitalized an additional $0.9 million of deferred financing costs in connection with the amendment, which, along with the $0.2 million of remaining deferred financing costs of the original revolving facility, is being amortized over the five year term of the Amended Wells Fargo Facility.
Current wording
The Company evaluated the Amended Wells Fargo Facility in accordance with the provisions of ASC 470-50 to determine if the amendment and restatement was a modification or an extinguishment of debt and concluded that the amendment and restatement was a modification of the original revolving credit facility for accounting purposes. As a result, the Company capitalized an additional $0.9 million of deferred financing costs in connection with the amendment and restatement, which, along with the $0.2 million of remaining deferred financing costs of the original revolving facility, is being amortized over the five year term of the Amended Wells Fargo Facility.
Previous wording
Under the terms of the Term Loan Facility, the Borrowers immediately borrowed $85 million pursuant to a term loan (the “Term Loan”), which had a maturity date in March 2027. Amounts borrowed under the Term Loan Facility were used by the Borrowers to repay the outstanding principal amount and related fees and expenses under the Prior Term Loan Facility (as defined below) and for other corporate purposes. The Company paid approximately $4.3 million of term loan deferred financing costs.
Current wording
Under the terms of the Term Loan Facility, the Borrowers immediately borrowed $85 million pursuant to a term loan (the “Term Loan”), which had a maturity date in March 2027. Amounts borrowed under the Term Loan Facility were used by the Borrowers to repay the outstanding principal amount and related fees and expenses under a prior term loan facility and for other corporate purposes. The Company paid approximately $4.3 million of term loan deferred financing costs.
Previous wording
The Company’s ability to comply with these covenants in future quarters may be affected by events beyond the Company’s control, including general economic conditions, weather conditions, regulations and refrigerant pricing. Therefore, we cannot make any assurance that we will continue to be in compliance during future periods.
Current wording
The Company’s ability to comply with these covenants in future quarters may be affected by events beyond the Company’s control, including general economic conditions, weather conditions, regulations and refrigerant pricing. Therefore, the Company cannot make any assurance that it will continue to be in compliance during future periods.
Previous wording
The Company believes that it will be able to satisfy its working capital requirements for the foreseeable future from anticipated cash flows from operations and available funds under the Amended Wells Fargo Facility. Any unanticipated expenses, including, but not limited to, an increase in the cost of refrigerants purchased by the Company, an increase in operating expenses or failure to achieve expected revenues from the Company’s RefrigerantSide® Services and/or refrigerant sales or additional expansion or acquisition costs that may arise in the future would adversely affect the Company’s future capital needs. There can be no assurance that the Company’s proposed or future plans will be successful, and as such, the Company may require additional capital sooner than anticipated, which capital may not be available on acceptable terms, or at all.
Current wording
The Company believes that it will be able to satisfy its working capital requirements for the foreseeable future from anticipated cash flows from operations and available funds under the Amended Wells Fargo Facility. Any unanticipated expenses, including, but not limited to, an increase in the cost of refrigerants purchased by the Company, an increase in operating expenses or failure to achieve expected revenues from the Company’s RefrigerantSide(R) Services and/or refrigerant sales or additional expansion or acquisition costs that may arise in the future would adversely affect the Company’s future capital needs. There can be no assurance that any of the Company’s proposed or future plans will be successful, and as such, the Company may require additional capital sooner than anticipated, which capital may not be available on acceptable terms, or at all.
Previous wording
For the year ended December 31, 2023, there was one customer accounting for greater than 10% of the Company’s revenues and one customer accounted for over 10% of the outstanding accounts receivable at December 31, 2023. For the year ended December 31, 2022, there was no customer accounted for 10% of the Company’s revenues but one customer accounted for over 10% of the outstanding accounts receivable at December 31, 2022. For the year ended December 31, 2021, one customer accounted for 10% of the Company’s revenues and one customer accounted for over 10% of the outstanding accounts receivable at December 31, 2021.
Current wording
For the year ended December 31, 2024, the DLA accounted for greater than 10% of the Company’s revenues and over 10% of the outstanding accounts receivable at December 31, 2024. For the year ended December 31, 2023, the DLA accounted for greater than 10% of the Company’s revenues and over 10% of the outstanding accounts receivable at December 31, 2023. For the year ended December 31, 2022, no customer accounted for 10% of the Company’s revenues; however, the DLA accounted for over 10% of the outstanding accounts receivable at December 31, 2022.
Previous wording
See recent accounting pronouncements set forth in Note 1 of the financial statements contained in this report and commitments and contingencies noted in Note 11 thereof.
Current wording
See recent accounting pronouncements set forth in Note 1 of the financial statements contained in this report and commitments and contingencies described in Note 11 thereof.
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
RefrigerantSide® Services performed at a customer’s site, consisting of system decontamination to remove moisture, oils and other contaminants.
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
Year ended December 31, 2022 as compared to the year ended December 31, 2021