Hudson Technologies, Inc. (NASDAQ:HDSN) Q1 2022 Earnings Conference Call May 4, 2022 5:00 PM ET Company Participants Jen Belodeau - Investor Relations Brian Coleman - President and Chief Executive Officer Nat Krishnamurti - Chief Financial Officer Conference Call Participants Ryan Sigdahl - Craig-Hallum Operator Good afternoon, ladies and gentlemen and welcome to the Hudson Technologies’ First Quarter 2022 Earnings Call. At this time, all participants have been placed on a listen-only mode and we will open ...

Company Overview - Hudson Technologies is a refrigerant services company focused on providing environmentally sustainable solutions in the refrigeration industry[9]. - Hudson Technologies is recognized as the largest refrigerant reclaimer in the United States, emphasizing its commitment to sustainability and the circular economy[22]. Financial Performance - Revenues for the year ended December 31, 2021 were $192.7 million, an increase of $45.1 million or 30.6% from $147.6 million in 2020[122]. - Cost of sales for 2021 was $121.1 million, representing 63% of sales, down from 76% in 2020, primarily due to higher selling prices and lower costs of certain refrigerants[123]. - Net income for the year ended December 31, 2021 was $32.3 million, an increase of $37.5 million from a net loss of $5.2 million in 2020[128]. - Working capital increased to $55.5 million as of December 31, 2021, up $31.1 million from $24.4 million in 2020[129]. - Inventory as of December 31, 2021 was $94.1 million, an increase of $49.6 million from $44.5 million in 2020, driven by rising inventory costs[130]. - Trade receivables increased to $14.2 million as of December 31, 2021, up $4.4 million from $9.8 million in 2020[131]. - Net cash used in operating activities for 2021 was $1.2 million, a reduction of $12.9 million compared to net cash provided of $11.7 million in 2020[132]. - Net cash provided by financing activities for 2021 was $5.3 million, compared to net cash used of $12.5 million in 2020, mainly due to borrowings under the revolving credit facility[134]. - As of December 31, 2021, cash and cash equivalents were $3.5 million, an increase of approximately $2.2 million from $1.3 million in 2020[135]. Regulatory Environment - The company operates in a highly regulated industry, with significant changes in regulations affecting the production and consumption of refrigerants[12]. - The refrigerant reclamation and management business is subject to extensive regulatory compliance, which may require the company to alter operations or discontinue certain products, potentially resulting in substantial costs[82]. - An amendment to the Montreal Protocol requires developed countries to reduce HFC production and use by 85% by 2047, with initial reductions starting in 2019, impacting the company's operations[84]. Customer Relationships - For the year ended December 31, 2021, one customer accounted for 10% of the company's revenues, highlighting the importance of key customer relationships[37]. - The company’s contract with the United States Defense Logistics Agency accounted for 10% and 14% of revenues for the years ended December 31, 2021, and 2020, respectively[79]. Competition and Market Risks - Hudson Technologies competes on the basis of its proprietary high-volume equipment and breadth of services, facing competition from both regional and national companies[40]. - The company faces strong competition from regional and national companies, which may hinder its ability to compete effectively, especially in new markets[85]. - The company is exposed to market risk from fluctuations in the demand, price, and availability of refrigerants, which could materially affect revenue[203]. Financing and Capital Structure - The company has an asset-based lending facility of up to $90 million and a term loan of $85 million, both secured by substantially all assets[67]. - The company may need additional financing to satisfy future capital requirements, which may not be readily available[72]. - The company has the authority to issue up to 5,000,000 shares of "blank check" preferred stock, which could impede changes in control and affect common stock holders[86]. - The company's common stock is listed on the NASDAQ Capital Market, and failure to comply with NASDAQ rules could severely limit market liquidity[87]. - Approximately 10% of the company's outstanding common stock is beneficially owned by its officers and directors, giving them significant control over corporate transactions[88]. Operational Efficiency - Hudson Technologies offers proprietary services such as RefrigerantSide® Services, which improve system performance and reduce energy consumption[24]. - The company has developed SmartEnergy OPS®, a web-based real-time monitoring service that enhances the efficiency of energy systems, including refrigeration[32]. - The company employs twelve full-time personnel for quality control and regulatory compliance monitoring[59]. - The company holds several U.S. and foreign patents related to refrigerant recycling and reclamation technologies, with expiration dates between January 2023 and July 2035[61]. Risk Management - The company maintains environmental impairment insurance of $10,000,000 per occurrence and $10,000,000 annual aggregate for events occurring after November 1996[45]. - The company believes it is in material compliance with all applicable regulations material to its business operations[58]. - The company’s business could be negatively impacted by adverse weather or economic downturns, affecting demand and pricing for refrigerants[73]. - The company faces risks related to the phase-out of virgin HCFC refrigerants, which could impact revenue from refrigerant sales[191]. COVID-19 Impact - The company has implemented measures to ensure business continuity during the COVID-19 pandemic, with no material impact on its ability to procure or distribute products[106]. Internal Controls - The company's disclosure controls and procedures were evaluated and deemed effective by the Chief Executive Officer and Chief Financial Officer[206]. - There were no changes in internal control over financial reporting that materially affected the company during the quarter ended December 31, 2021[207]. - The company's internal control over financial reporting is designed to provide reasonable assurance regarding the preparation and fair presentation of financial statements[208].

Financial Data and Key Metrics Changes - For Q4 2021, Hudson recorded revenues of $37.8 million, a 71% increase compared to $22.1 million in Q4 2020, driven by higher selling prices for certain refrigerants [19] - Gross margin improved to 45% in Q4 2021 from 25% in Q4 2020, primarily due to higher selling prices [20] - For the full year 2021, revenues reached $192.7 million, a 31% increase from $147.6 million in 2020, with a gross margin of 37% compared to 24% in 2020 [23] Business Line Data and Key Metrics Changes - The company expects gross margin performance in 2022 to be in the low 30% range, with potential improvements as reclamation volumes increase [10][21] - Operating income for Q4 2021 was $9.3 million, compared to an operating loss of $1.7 million in Q4 2020 [22] Market Data and Key Metrics Changes - The average selling price of refrigerants increased sequentially from Q3 to Q4 2021, contrary to expectations of stability [8] - The AIM Act mandates a 10% step-down in production and consumption allowances for Virgin HCFs in 2022, with further phasedowns over the next 15 years [13] Company Strategy and Development Direction - Hudson aims to leverage its position as a leading reclaimer to support the transition away from Virgin HCFs, with a focus on sustainability and reclamation capabilities [14][17] - The company is actively pursuing opportunities to assist OEMs in meeting California Air Resources Board (CARB) requirements for reclaim refrigerants [15][16] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism for 2022, anticipating revenues could exceed $270 million if pricing trends continue [8] - The company highlighted the importance of reclamation in maintaining necessary HSC supply levels amid regulatory changes [13] Other Important Information - Hudson completed refinancing its debt with a new $85 million term loan and increased its ABL facility to $90 million, improving its cost of capital [11][25] - The company's leverage ratio improved significantly to 1.93:1 for the trailing 12 months ended December 31, 2021, down from 5.42:1 in the previous year [24] Q&A Session Summary Question: How is the HSC recovery in the market going? - Management noted that past reclamation volumes were lower than expected, but current regulations and stakeholder involvement may drive growth in reclamation [31][36] Question: Is pricing pressure due to supply chain issues or the AIM Act? - Management indicated that both supply chain issues and the AIM Act are contributing to pricing increases, with supply chain challenges expected to persist in the near term [37] Question: Are there any shifts in buying patterns for refrigerants this year? - Management suggested a potential hybrid approach to inventory, with some companies possibly stocking more products earlier due to concerns about availability [39] Question: What are the current price assumptions for R-22 and R-410A? - Management stated that R-22 pricing is around $30 per pound, while HFC pricing is above $10 per pound, reflecting significant increases throughout 2021 [41][42] Question: How does the gross margin expectation for 2022 compare to 2024 targets? - Management expects low 30% gross margins to be sustainable, with potential for improvement as reclaimed volumes grow, particularly in 2023 [43][44] Question: Can you discuss the debt refinance process and lender selection? - Management explained that they engaged a broad range of lenders and chose TCW due to their strong relationship and understanding of the business [48][50]

INVESTOR PRESENTATION NOVEMBER 2021 RECLAIMED REFRIGERANT ON-SITE REFRIGERANT SERVICE OPS® SMARTENERGY 0PS® REFRIGERANT END OF LIFE MANAGEMENT SAFE HARBOR STATEMENT 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, performan ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 FORM 10-Q ⌧ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2021 Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and ...

Financial Performance - For the three months ended June 30, 2021, Hudson Technologies reported revenues of $60,548,000, a 27% increase from $47,677,000 in the same period of 2020[9]. - Gross profit for the same period was $21,828,000, representing a 72% increase compared to $12,681,000 in Q2 2020[9]. - Operating income for the three months ended June 30, 2021, was $14,363,000, up from $5,208,000 in Q2 2020, marking a 175% increase[9]. - Net income for the six months ended June 30, 2021, was $10,201,000, compared to a net loss of $499,000 in the same period of 2020[9]. - The company recorded a net income of $11.3 million for the three months ended June 30, 2021, compared to a net income of $2.4 million for the same period in 2020[54]. - Revenues for the three-month period ended June 30, 2021 were $60.5 million, an increase of $12.8 million or 26.8% from the $47.7 million reported during the comparable 2020 period[154]. - Revenues for the six-month period ended June 30, 2021 were $94.3 million, an increase of $10.3 million or 12.3% from the $84.0 million reported during the comparable 2020 period[160]. - Net income for the six-month period ended June 30, 2021 was $10.2 million, an increase of $10.7 million from the $0.5 million of net loss reported during the comparable 2020 period[165]. Assets and Liabilities - Total current assets increased to $94,624,000 as of June 30, 2021, up from $62,142,000 at the end of 2020, reflecting a 52% growth[8]. - Total liabilities rose to $139,485,000 as of June 30, 2021, compared to $121,027,000 at the end of 2020, representing a 15% increase[8]. - The company’s accumulated deficit decreased to $67,879,000 as of June 30, 2021, from $78,080,000 at the end of 2020, showing improvement in financial health[8]. - As of June 30, 2021, the company reported trade receivables of $35.1 million, with an allowance for doubtful accounts of $1.8 million, resulting in net accounts receivable of $33.3 million[29]. - The Company had working capital of $34.8 million at June 30, 2021, an increase of $10.4 million from $24.4 million at December 31, 2020[166]. - As of June 30, 2021, the company reported inventories of $48.3 million, an increase of $3.8 million from $44.5 million at December 31, 2020[167]. - Trade receivables increased to $33.3 million, up $23.5 million from $9.8 million at December 31, 2020, primarily due to increased sales[167]. Cash Flow and Financing - Cash and cash equivalents at the end of the period were $1,873,000, compared to $1,348,000 at the end of 2020, indicating a 39% increase[8]. - Net cash used in operating activities for the six-month period ended June 30, 2021 was $8.4 million, compared to net cash provided of $2.6 million for the same period in 2020[168]. - Net cash provided by financing activities for the six-month period ended June 30, 2021 was $9.4 million, compared to $3.3 million for the same period in 2020[170]. - The Company received a $2.475 million loan under the Paycheck Protection Program (PPP) with a fixed interest rate of 1% and a two-year term[124]. - The Company has applied for loan forgiveness for the PPP loan, but there are no assurances of full forgiveness based on current guidelines[124]. - The Company believes it can satisfy its working capital requirements from anticipated cash flows and available funds under the Wells Fargo Facility[123]. Debt and Covenants - Total short-term and long-term debt as of June 30, 2021 was $97.075 million, an increase from $87.290 million at December 31, 2020, indicating a rise of 11.5%[96]. - The Company must maintain minimum liquidity of at least $5 million under the Wells Fargo Facility, with at least $3 million derived from availability[102]. - The Fourth Amendment reset the maximum TLR covenant at various dates, with September 30, 2021, set at 6.08:1 and December 31, 2021, at 5.36:1[115]. - The Company was in compliance with all covenants under the Wells Fargo Facility and the Term Loan Facility as of June 30, 2021[122]. - The Fourth Amendment required a principal repayment of $14 million upon execution and increased scheduled quarterly principal repayments to $1.312 million effective December 31, 2020[116]. Operational Insights - Hudson Technologies continues to invest in advanced separation technology to enhance its refrigerant reclamation capabilities, supporting its commitment to sustainability[19]. - The company is actively monitoring the impact of COVID-19 on its operations and has not experienced material disruptions in product procurement or distribution as of the reporting date[22]. - The Company’s refrigerant sales could be adversely affected by sourcing challenges or price declines, impacting revenue and operating results[59]. - The Company faces potential adverse effects on revenue from refrigerant sales due to regulatory changes and supply chain issues[202]. - The Company's operating results are seasonal, with peak refrigerant sales occurring in the first nine months of each year[205]. Accounting and Valuation - The company applies the FASB's guidance on revenue recognition, recognizing revenue when performance obligations are satisfied, typically upon shipment of products[42]. - The company has established a valuation allowance of approximately $14.0 million as of June 30, 2021, due to uncertainty regarding the realization of deferred tax assets[52]. - The Company recorded a full valuation allowance for deferred tax assets as of June 30, 2021 due to uncertainty regarding future realization[164]. - The Company evaluates its estimates related to doubtful accounts and inventory reserves continuously, which could materially affect its financial position if actual results differ from estimates[57]. - The Company is currently assessing the impact of new accounting standards on its financial statements, including ASU 2020-06 and ASU 2016-13[62][65]. Shareholder Information - The weighted average number of diluted shares for the six months ended June 30, 2021, was 45,844,545, compared to 42,628,560 for the same period in 2020[54]. - As of June 30, 2021, there were 3,786,653 shares of common stock available under the Company's stock option and incentive plans for future grants[86]. - The intrinsic value of options outstanding at June 30, 2021 was $10.8 million, up from $0.7 million at December 31, 2020, representing a significant increase of 1,442.9%[93]. - The intrinsic value of options exercised during the six months ended June 30, 2021 was $1.6 million, compared to $0 for the same period in 2020[95]. - Share-based compensation expense for the six months ended June 30, 2021 was $0.4 million, compared to $0.3 million for the same period in 2020, reflecting a 33.3% increase[85].

Hudson Technologies, Inc. (NASDAQ:HDSN) Q2 2021 Earnings Conference Call August 4, 2021 5:00 PM ET Company Participants John Nesbett – Institutional Marketing Services, Inc. Brian Coleman – President and Chief Executive Officer Nat Krishnamurti – Chief Financial Officer Conference Call Participants Ryan Sigdahl – Craig-Hallum Operator Good afternoon, ladies and gentlemen, and welcome to the Hudson Technologies Second Quarter 2021 Earnings Call. At this time all participants have been placed on a listen-only ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 FORM 10-Q x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2021 OR ¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ____________ to ____________ Commission file number 1-13412 If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended tra ...

Hudson Technologies, Inc.'s (NASDAQ:HDSN) Q1 2021 Earnings Conference Call May 5, 2021 5:00 PM ET Company Participants Jennifer Bella - Investor Relations Brian Coleman - Chairman of the Board, President and Chief Executive Officer Nat Krishnamurti - Chief Financial Officer Conference Call Participants Ryan Sigdahl - Craig-Hallum Capital Group Gerard Sweeney - ROTH Capital Partners Operator Good afternoon, ladies and gentlemen, and welcome to the Hudson Technologies First quarter 2021 Earnings Call. At this ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-K x ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2020 OR ¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ____________ to ____________ Commission file number 1-13412 Hudson Technologies, Inc. (Exact name of registrant as specified in its charter) New York 13-3641539 (State or Oth ...