Hudson Technologies(HDSN) - 2024 Q3 - Quarterly Report

Financial Performance - Revenues for the three months ended September 30, 2024, were $61,943,000, a decrease of 18.9% compared to $76,496,000 for the same period in 2023[7] - Gross profit for the nine months ended September 30, 2024, was $59,934,000, down 38.4% from $97,537,000 in the prior year[7] - Operating income for the three months ended September 30, 2024, was $6,973,000, a decline of 69.9% from $23,122,000 in the same quarter of 2023[7] - Net income for the three months ended September 30, 2024, was $7,806,000, compared to $13,582,000 for the same period in 2023, representing a decrease of 42.5%[7] - Basic net income per common share for the three months ended September 30, 2024, was $0.17, down from $0.30 in the prior year[7] - Total operating expenses for the nine months ended September 30, 2024, were $27,387,000, an increase of 13.0% from $24,105,000 in the previous year[7] - The company reported a net income of $26,953,000 for the nine months ended September 30, 2024, down from $48,302,000 in the same period of 2023[7] - Net income for the nine-month period ended September 30, 2024, was $26.953 million, a decrease from $48.302 million in the same period of 2023[12] Cash Flow and Liquidity - Cash provided by operating activities increased to $71.103 million from $43.518 million year-over-year[12] - Cash and cash equivalents at the end of the period were $56.487 million, up from $3.783 million at the end of the previous year[12] - The company reported a loss on extinguishment of debt amounting to $3.427 million in the previous period[12] - Cash paid for interest in the nine-month period was $0.529 million, compared to $4.232 million in the same period of 2023[12] Acquisitions and Growth - The company completed the acquisition of USA Refrigerants for approximately $20.7 million in cash, with a potential contingent payment of up to $2.0 million[18] - The acquisition is expected to enhance the company's refrigerant distribution capabilities and broaden its customer network[19] - The fair value of the assets acquired from the USA Refrigerants Acquisition included inventories valued at $5.1 million and customer relationships valued at $1.1 million[111] - The Company incurred $0.3 million in acquisition costs related to the USA Refrigerants Acquisition, included in selling, general, and administrative expenses[113] Inventory and Assets - The company reported an increase in inventories to $52.189 million, compared to $8.341 million in the previous year[12] - The Company reported total inventories of $103.5 million as of September 30, 2024, down from $154.5 million as of December 31, 2023, reflecting a decrease of approximately 33%[65] - The Company’s total property, plant, and equipment amounted to $20.1 million as of September 30, 2024, compared to $19.4 million as of December 31, 2023, indicating a growth of about 3.7%[66] Shareholder Equity and Stock - The balance of common stock as of September 30, 2024, was $452,000, with total stockholders' equity amounting to $253,895,000[9] - The company authorized a share repurchase program of up to $10 million for 2024 and 2025, with 326,028 shares repurchased for $2.6 million at an average price of $8.06 per share during the quarter ended September 30, 2024[114] - The Company has increased its share repurchase program to allow for up to $20 million in total purchases[180] Market and Regulatory Environment - The company received allocation allowances for HFC consumption equal to approximately 1% for the years 2023 and 2024 under the AIM Act[21] - The EPA's final Refrigerant Management Rule mandates better management and reuse of existing HFCs, which will support the company's reclamation efforts[22] - The EPA's AIM Act mandates a cumulative 40% reduction in HFC production and consumption from baseline levels between 2024 and 2029[21] Operational Challenges - The Company is exposed to market risks from fluctuations in refrigerant demand, price, and availability, which could adversely affect revenue[175] - The Company reported that inflation has impacted salaries and wages but less so on other operational aspects[167] - The Company's operating results are seasonal, with peak refrigerant sales occurring in the first nine months of each year[173]