Hudson Technologies(HDSN)2025-05-09 20:05Financial Performance - Revenues for the three months ended March 31, 2025, were $55,343,000, a decrease of 15.3% compared to $65,250,000 for the same period in 2024[10] - Gross profit for the same period was $12,068,000, down 43.7% from $21,421,000 in 2024[10] - Net income for Q1 2025 was $2,758,000, a decline of 71.2% compared to $9,562,000 in Q1 2024[10] - For the three-month period ended March 31, 2025, total revenues were $55.343 million, a decrease of 15.2% from $65.250 million in the same period of 2024[53] - Product and related sales accounted for $53.865 million, down from $63.811 million, representing a decline of 15.6% year-over-year[53] - RefrigerantSide® Services revenue was $1.478 million, slightly up from $1.439 million, indicating a growth of 2.7%[53] - Net income for the three-month period ended March 31, 2025, was $2.758 million, a significant decrease of 71.1% from $9.562 million in the prior year[57] - The effective tax rate for the three-month period ended March 31, 2025, was 24.5%, compared to 23.9% for the same period in 2024[132] Assets and Liabilities - Total current assets increased to $201,344,000 as of March 31, 2025, from $195,512,000 at the end of 2024[8] - Total liabilities rose to $61,063,000 as of March 31, 2025, compared to $56,802,000 at the end of 2024[8] - The Company reported total inventories of $78.299 million as of March 31, 2025, down from $96.247 million as of December 31, 2024, reflecting a decrease of approximately 18.7%[73] - The Company had trade receivables of $27.5 million, an increase of $13.9 million from $13.6 million at December 31, 2024, primarily due to seasonal timing[136] - The cylinder deposit liability increased to $20.5 million at March 31, 2025, compared to $19.4 million at December 31, 2024, showing a growth of 5.7%[47] - The Company had working capital of $149.0 million, an increase of $1.3 million from $147.7 million at December 31, 2024[134] Cash Flow - Cash provided by operating activities for Q1 2025 was $14,156,000, compared to a cash used of $933,000 in Q1 2024[15] - Cash and cash equivalents at the end of Q1 2025 were $81,048,000, an increase from $70,134,000 at the beginning of the period[15] - Net cash provided by operating activities for the three-month period ended March 31, 2025, was $14.2 million, compared to net cash used of $0.9 million for the same period in 2024[137] - Net cash used in investing activities for the three-month period ended March 31, 2025, was $1.4 million, up from $1.0 million in the comparable 2024 period, mainly due to capital expenditures related to the ERP system[138] Acquisition - 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[22] - The acquisition is expected to enhance the company's refrigerant distribution capabilities and broaden its customer network[23] - The acquisition resulted in the recognition of $14.5 million of goodwill, which is expected to be deductible for tax purposes[115] - The Company incurred $0.3 million of acquisition costs related to the USA Refrigerants Acquisition, included in SG&A expenses for the year ended December 31, 2024[115] Shareholder Actions - During the three-month period ended March 31, 2025, options to purchase 391,140 shares were granted, with a weighted average exercise price of $5.95[95] - The Company repurchased 308,588 shares for $1.8 million at an average price of $5.94 per share during the three-month period ended March 31, 2025[139] - The total dollar value of shares that may yet be purchased under the repurchase program is $8.2 million[170] - The Board of Directors approved an increase to the repurchase program, allowing for up to $20 million in shares to be purchased during 2024 and 2025[172] Financial Covenants and Compliance - The Company had borrowing availability of approximately $75 million from the Amended Wells Fargo Facility as of March 31, 2025, with no balance outstanding[105] - The Amended Wells Fargo Facility includes a financial covenant requiring a minimum liquidity of at least $5 million, with at least $3 million derived from availability[103] - The Company was in compliance with all covenants under the Amended Wells Fargo Facility as of March 31, 2025[110] Market Risks - The Company is exposed to market risk from fluctuations in the demand, price, and availability of refrigerants, which could adversely affect revenue from refrigerant sales[162] - The United States Defense Logistics Agency accounted for over 10% of the Company's revenue and outstanding accounts receivable, totaling $6.2 million as of March 31, 2025[157] Internal Controls and Accounting - The Company evaluated the effectiveness of its disclosure controls and procedures, concluding they were effective as of the end of the reporting period[164] - No changes occurred during the quarter ended March 31, 2025, that materially affected the internal control over financial reporting[165] - The Company is currently evaluating the impact of new accounting standards on its consolidated financial statements, including ASU 2023-09 and ASU 2024-03[66][68]