Core Insights - Hudson Technologies Inc. (HDSN) is well-positioned in the refrigerant supply chain, focusing on reclaiming used refrigerants and selling them to wholesalers and end-users [1] Company Overview - HDSN operates in the refrigerant supply chain, emphasizing the reclamation of used refrigerants [1] - The company targets both wholesalers and end-users for its products [1] Investment Perspective - The company is considered a suitable fit for Berkshire's investment portfolio due to its strategic positioning and potential for sustained profitability [1] - The focus on strong margins, stable and expanding free cash flow, and high returns on invested capital is highlighted as a reliable driver of returns [1]

Financial Performance - Revenues for Q3 2025 reached $74,012,000, a 19.5% increase from $61,943,000 in Q3 2024[10] - Gross profit for Q3 2025 was $23,674,000, compared to $15,942,000 in Q3 2024, reflecting a 48.8% increase[10] - Net income for the three months ended September 30, 2025, was $12.374 million, up 58.5% from $7.806 million in 2024[60] - Operating income for Q3 2025 was $13,968,000, significantly higher than $6,973,000 in Q3 2024, representing a 100.4% increase[10] - Revenues for the nine-month period ended September 30, 2025, were $202.2 million, consistent with $202.5 million reported in the comparable 2024 period, with a 3% increase in sales volume offset by a 3% decline in selling prices[142] - Gross profit for the nine-month period ended September 30, 2025, was $58.6 million, with a gross margin of 29%, down from $59.9 million and 30% in the same period of 2024[143] Assets and Liabilities - Total current assets increased to $234,359,000 as of September 30, 2025, up from $195,512,000 at the end of 2024[8] - Total liabilities rose to $73,057,000 as of September 30, 2025, compared to $56,802,000 at the end of 2024[8] - Cash and cash equivalents at the end of Q3 2025 were $89,681,000, compared to $70,134,000 at the end of 2024, marking a 27.9% increase[8] - The company's inventory as of September 30, 2025, was valued at $97.414 million, an increase from $96.247 million as of December 31, 2024[79] - Trade receivables at September 30, 2025, were $25.4 million, an increase of $11.8 million from $13.6 million at December 31, 2024[151] Cash Flow and Operating Activities - Cash provided by operating activities for the nine months ended September 30, 2025, was $29,381,000, down from $71,103,000 in the same period of 2024[17] - Net cash provided by operating activities for the nine-month period ended September 30, 2025, was $29.4 million, compared to $71.1 million for the comparable 2024 period[152] Share Repurchase and Acquisitions - The Company completed the acquisition of USA Refrigerants and B&B Jobber Services for approximately $20.7 million in cash, with a potential contingent payment of up to $2.0 million[24] - The Company incurred $5,820,000 in share repurchases during the nine months ended September 30, 2025[17] - During the nine-month period ended September 30, 2025, the Company repurchased 939,259 shares for a total of $5.8 million at an average price of $6.20 per share[122] - The acquisition resulted in the recognition of $14.5 million of goodwill, with $12.9 million being tax-deductible[119] Debt and Financing - The Company has borrowing availability of approximately $40 million from the Amended Wells Fargo Facility as of September 30, 2025, with no outstanding balance[114] - The Amended Wells Fargo Facility requires the Company to maintain minimum liquidity of at least $5 million, with at least $3 million from availability[108] - The Amended Wells Fargo Facility has a maturity date of March 2, 2027, unless terminated sooner due to an event of default[167] Market and Regulatory Environment - The AIM Act mandates a cumulative 40% reduction in HFC production and consumption from baseline levels for the years 2024 through 2029[28] - The Company is exposed to market risks from fluctuations in the demand, price, and availability of refrigerants, which could materially affect revenue[177] Tax and Accounting - The company assesses uncertain tax positions and believes it had no uncertain tax positions as of September 30, 2025[59] - The company is currently evaluating the impact of new accounting standards, including ASU 2023-09 and ASU 2024-03, on its consolidated financial statements[71][72] Stock Options and Compensation - The intrinsic value of options outstanding at September 30, 2025, was $16.8 million, compared to $8.6 million at December 31, 2024[100] - Share-based compensation expense for the nine-month periods ended September 30, 2025, and 2024 was $0.6 million and $0.8 million, respectively[92]

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Core Insights - Hudson Technologies (HDSN) reported quarterly earnings of $0.27 per share, exceeding the Zacks Consensus Estimate of $0.21 per share, and up from $0.17 per share a year ago, representing an earnings surprise of +28.57% [1] - The company posted revenues of $74.01 million for the quarter ended September 2025, which was 1.32% below the Zacks Consensus Estimate, but an increase from $61.94 million year-over-year [2] - Hudson Tech shares have appreciated approximately 52.2% year-to-date, significantly outperforming the S&P 500's gain of 15.1% [3] Earnings Outlook - The future performance of Hudson Tech's stock will largely depend on management's commentary during the earnings call and the company's earnings outlook [4] - The current consensus EPS estimate for the upcoming quarter is -$0.03 on revenues of $39.49 million, while for the current fiscal year, the estimate is $0.47 on revenues of $241.4 million [7] Industry Context - The Industrial Services industry, to which Hudson Tech belongs, is currently ranked in the bottom 26% of over 250 Zacks industries, indicating potential challenges ahead [8] - Empirical research suggests a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors [5]

Financial Data and Key Metrics Changes - Hudson Technologies reported a 20% increase in revenue for Q3 2025, reaching $74 million, driven by increased sales volume and higher average sales prices of refrigerants [6][18] - Gross margin improved to 32%, reflecting a 630 basis point increase compared to Q3 2024, with gross profit rising to $23.7 million from $15.9 million [6][18] - Net income increased by 59% to $12.4 million, or $0.27 per share, compared to $7.8 million, or $0.17 per share in the previous year [6][19] Business Line Data and Key Metrics Changes - The growth in revenue was attributed to both increased sales volume and higher average sales prices, particularly in the refrigerant market [6][18] - Hudson's reclamation business saw positive growth, reflecting the company's outreach efforts to encourage the return of used refrigerants [6][11] Market Data and Key Metrics Changes - The HFC market pricing was approximately $8 per pound in Q3, with R-410A representing about 70% of total aftermarket demand for HFCs [6][7] - The EPA reported a 19% growth in refrigerant reclamation activity for the industry in 2024, with Hudson's reclamation growing at a similar rate [6][9] Company Strategy and Development Direction - The company is focused on advancing its growth strategy through both organic and inorganic opportunities, with an emphasis on acquiring a CEO with experience in larger companies and acquisitions [6][4][32] - Hudson aims to capitalize on the ongoing phase-down of HFC refrigerants, viewing it as a significant long-term growth opportunity [6][12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate the current market dynamics, despite the anticipated supply-demand imbalance extending to 2029 [6][12][32] - The company is closely monitoring EPA proposals that may impact the refrigerant market and is positioned to benefit from state-level initiatives promoting lower GWP refrigerants [6][13][14] Other Important Information - Hudson was awarded a renewal contract valued at $210 million with the U.S. Defense Logistics Agency, reinforcing its position as a prime contractor since 2016 [6][8] - The company ended the quarter with $90 million in cash and a focus on opportunistic share repurchases, having repurchased $1.3 million of stock in Q3 2025 [6][19] Q&A Session Summary Question: What alternative skill sets are being sought in the new CEO? - Management is looking for a candidate with a larger company background, experience in acquisitions, and skills in organic growth beyond just refrigerant reclamation [6][24][32] Question: What are the expectations for HFC pricing next year? - Management expects HFC pricing to remain consistent with this year, despite market volatility [6][28] Question: How does the EPA data impact Hudson's strategy? - Management acknowledges the need to reduce exposure to gas market fluctuations and plans to pursue both organic growth and M&A opportunities [6][32] Question: What is the expected revenue from the DLA contract? - The revenue from the DLA contract is expected to be consistent with previous levels, around $30 million to $35 million [6][33] Question: Will A2Ls become a core part of the business? - A2Ls are expected to grow in importance as the market transitions, alongside the continued demand for existing HFCs [6][35]

Financial Results - Hudson Technologies, Inc. reported its financial results for Q3 2025, with specific details provided in the press release issued on November 3, 2025[5] - The press release containing the financial results is furnished as Exhibit 99.1, which includes detailed performance metrics[9] Management Changes - The company announced a management change, with Brian F. Coleman stepping down as Chairman, President, and CEO, effective immediately[6]

Core Insights - Hudson Technologies reported strong financial results for Q3 2025, with a revenue growth of 20%, improved gross margin of 32%, and a net income increase of 59% to $12.4 million or $0.27 per diluted share [2][7][8] Financial Performance - For Q3 2025, revenues reached $74.0 million, up from $61.9 million in Q3 2024, driven by increased sales volume and higher average pricing for refrigerants [8][21] - Gross margin improved to 32.0% compared to 25.7% in Q3 2024, primarily due to favorable pricing conditions [8][21] - Operating income doubled to $14.0 million from $7.0 million in the prior year [8] - Selling, general and administrative expenses rose to $8.9 million from $8.1 million in Q3 2024 [8] Year-to-Date Results - For the nine months ended September 30, 2025, revenues were $202.2 million, slightly down from $202.5 million in the same period of 2024, attributed to a slight decrease in sales pricing [6][14] - Net income for the nine months was $25.3 million or $0.58 per basic share, compared to $27.0 million or $0.59 per basic share in the first nine months of 2024 [14][21] Strategic Developments - Hudson Technologies was awarded a $210 million contract to supply refrigerants and industrial gases to the U.S. military, reinforcing its long-standing partnership with the Defense Logistics Agency [4] - The company maintains a strong cash position of approximately $90 million and has no debt as of September 30, 2025 [5][9] Capital Allocation - The company continues to pursue a disciplined capital allocation strategy, focusing on organic growth, acquisition opportunities, and stock repurchases, having repurchased $5.8 million in common stock in 2025 [5]

Core Insights - Hudson Technologies, Inc. announced strong preliminary financial results for Q3 2025, with a revenue growth of 20% to $74.0 million compared to $61.9 million in Q3 2024, and a net income growth of 59% to $12.4 million, or $0.27 per diluted share [5] Leadership Changes - Brian Coleman has stepped down as Chairman and CEO effective immediately after leading the company since June 2020 [1][2] - Vincent Abbatecola, Lead Independent Director, expressed gratitude for Coleman's contributions, particularly during challenging times [3] - Brian Bertaux, CFO, will serve as interim CEO while the Board evaluates candidates for a permanent replacement [4] Financial Performance - The company expects to report a gross margin of 32% for Q3 2025 [5] - Full financial results will be announced on November 5, 2025 [5] Company Overview - Hudson Technologies is a leading provider of sustainable refrigerant products and services, focusing on the HVAC and refrigeration industry [6] - The company has invested significantly in advanced separation technology for refrigerant reclamation, positioning itself as one of the largest refrigerant reclaimers in the U.S. [6] - Its services include refrigerant management, system decontamination, and real-time monitoring of refrigeration systems [6]

Core Insights - Hudson Technologies, Inc. has been awarded a contract valued at approximately $210 million by the United States Defense Logistics Agency for a five-year base period, continuing its role as prime contractor since 2016 [1][2][3] Group 1: Contract Details - The contract is an indefinite delivery, indefinite quantity (IDIQ) agreement that includes a five-year renewal option, focusing on the management and supply of refrigerants, compressed gases, and related items to U.S. Military Commands and Federal civilian agencies [2] - Primary users of the contract include the U.S. Army, Navy, Air Force, and Marine Corps, highlighting the importance of Hudson's products in military operations [2] Group 2: Company Background - Hudson Technologies is recognized as a leading provider of innovative and sustainable refrigerant products and services, with nearly three decades of experience in the Heating, Ventilation, Air Conditioning, and Refrigeration industry [4] - The company has made significant investments in advanced separation technology to recover a wide variety of refrigerants, establishing itself as one of the largest refrigerant reclaimers in the U.S. [4] - Hudson's services include refrigerant management, reclamation, and various predictive and diagnostic service offerings, contributing to its commitment to environmental sustainability [4]

Core Viewpoint - Hudson Technologies, Inc. will host a conference call on November 5, 2025, to discuss its third quarter 2025 results [1] Company Overview - Hudson Technologies, Inc. is a leading provider of innovative and sustainable refrigerant products and services in the Heating Ventilation Air Conditioning and Refrigeration industry [3] - The company has been a significant player in refrigerant reclamation for nearly three decades, investing multimillion dollars in advanced separation technology [3] - Hudson Technologies offers a range of services including refrigerant and industrial gas sales, refrigerant management services, and system decontamination [3] - The company also provides SmartEnergy OPS®, a web-based real-time monitoring service, along with predictive and diagnostic services like Chiller Chemistry® and Chill Smart® [3] - Additionally, Hudson Technologies generates carbon offset projects as part of its service offerings [3]