Hudson Technologies(HDSN) - 2025 Q2 - Quarterly Results

Earnings Release Overview Hudson Technologies announced its Q2 2025 financial results, highlighting key performance metrics and providing an outlook on business strategies and market positioning Q2 2025 Highlights Hudson Technologies reported Q2 2025 results with a slight revenue decrease but improved gross margin and a strong cash position, reflecting operational resilience despite a slow start to the selling season | Metric | Value | | :--------------------- | :---------- | | Second Quarter Revenue | $72.8 million | | Gross Margin | 31% | | Net Income | $10.2 million | | Diluted EPS | $0.23 | | Cash at June 30, 2025 | $84.3 million | | Debt at June 30, 2025 | No debt | - Revenue decreased by 3% compared to Q2 2024, primarily due to decreased sales volume, partially offset by slightly increased pricing for certain refrigerants[7] - Gross margin improved to 31% from 30% in Q2 2024, mainly driven by slightly increased pricing[7] CEO Commentary and Business Outlook CEO Brian F. Coleman highlighted a solid Q2 performance, attributing improved gross margin to increased refrigerant pricing and enhanced sourcing of recovered refrigerants. He emphasized growth in the national reclamation business, strategic positioning for the HFC phase-down, and a disciplined capital allocation strategy focused on organic growth, acquisitions, and stock repurchases - Delivered a solid second quarter despite a slow start to the core selling season due to mild temperatures in the Northeast and Midwest[2] - Growth in the national reclamation business is attributed to Hudson's bolstered market presence and the strategic acquisition of USA Refrigerants[2] - The company is well-positioned for the third industry-wide HFC phase-down, which presents a significant long-term growth opportunity for reclaimed HFCs[4] - Strengthened unlevered balance sheet, ending the quarter with $84.3 million in cash, and committed to a capital allocation strategy focusing on organic growth, additive acquisitions, and opportunistic stock repurchases[5] Company Information This section provides an overview of Hudson Technologies, detailing its core business as a leading refrigerant reclaimer and its comprehensive range of services for the HVAC&R industry About Hudson Technologies Hudson Technologies, Inc. is a leading provider of innovative and sustainable refrigerant products and services to the HVAC&R industry, recognized as one of the largest refrigerant reclaimers in the U.S. The company offers a range of services including refrigerant sales, management, and specialized on-site services, along with energy monitoring and carbon offset projects - A leading provider of innovative and sustainable refrigerant products and services to the Heating Ventilation Air Conditioning and Refrigeration (HVAC&R) industry[11] - One of the first and largest refrigerant reclaimers in the United States, restoring refrigerants to Air-Conditioning, Heating, and Refrigeration Institute (AHRI) standards for reuse as certified EMERALD Refrigerants™[11] - Services include refrigerant and industrial gas sales, refrigerant management (reclamation), RefrigerantSide® Services (system decontamination), SmartEnergy OPS® (web-based monitoring), Chiller Chemistry®, Chill Smart® (predictive/diagnostic services), and carbon offset projects[11] Detailed Financial Performance This section presents a detailed analysis of Hudson Technologies' financial results for the second quarter and first half of 2025, comparing key metrics against the prior year Three Months Ended June 30, 2025 (Q2 Results) For the second quarter of 2025, Hudson Technologies experienced a slight revenue decline of 3.2% year-over-year, reaching $72.8 million, primarily due to decreased sales volume. Despite this, gross margin improved to 31%, and net income increased by 6.1% to $10.2 million | Metric | Q2 2025 (in thousands) | Q2 2024 (in thousands) | YoY Change (%) | | :-------------------------------- | :--------------------- | :--------------------- | :------------- | | Revenues | $72,849 | $75,282 | -3.23% | | Cost of sales | $50,038 | $52,711 | -5.07% | | Gross profit | $22,811 | $22,571 | 1.06% | | Gross margin | 31% | 30% | +1 pp | | Selling, general and administrative | $9,265 | $9,013 | 2.79% | | Operating income | $12,724 | $12,798 | -0.58% | | Net income | $10,168 | $9,585 | 6.08% | | Net income per diluted share | $0.23 | $0.20 | 15.00% | Six Months Ended June 30, 2025 (H1 Results) For the first six months of 2025, Hudson Technologies reported a 8.8% decrease in revenues to $128.2 million, driven by lower sales volume and decreased selling prices. Gross margin declined to 27% from 31% in the prior year, leading to a 32.5% decrease in net income to $12.9 million | Metric | H1 2025 (in thousands) | H1 2024 (in thousands) | YoY Change (%) | | :-------------------------------- | :--------------------- | :--------------------- | :------------- | | Revenues | $128,192 | $140,532 | -8.78% | | Cost of sales | $93,313 | $96,540 | -3.29% | | Gross profit | $34,879 | $43,992 | -20.71% | | Gross margin | 27% | 31% | -4 pp | | Selling, general and administrative | $17,435 | $16,960 | 2.80% | | Operating income | $15,799 | $25,574 | -38.22% | | Net income | $12,926 | $19,147 | -32.49% | | Net income per diluted share | $0.28 | $0.40 | -30.00% | - Revenues declined primarily due to a slight decrease in sales volume and decreased selling prices for certain refrigerants compared to the first six months of 2024[12] Consolidated Financial Statements This section provides the complete consolidated financial statements, including balance sheets, income statements, and cash flow statements, offering a comprehensive view of the company's financial position and performance Consolidated Balance Sheets As of June 30, 2025, Hudson Technologies' total assets increased to $317.9 million from $302.7 million at year-end 2024, driven by higher cash and trade accounts receivable, partially offset by lower inventories. Total liabilities also saw an increase to $63.1 million | Balance Sheet Item (in thousands) | June 30, 2025 | December 31, 2024 | Change | | :-------------------------------- | :------------ | :---------------- | :----- | | Cash and cash equivalents | $84,293 | $70,134 | +$14,159 | | Trade accounts receivable – net | $35,883 | $13,629 | +$22,254 | | Inventories | $77,683 | $96,247 | -$18,564 | | Total current assets | $212,587 | $195,512 | +$17,075 | | Total Assets | $317,853 | $302,652 | +$15,201 | | Total current liabilities | $54,804 | $47,809 | +$6,995 | | Total Liabilities | $63,074 | $56,802 | +$6,272 | | Total Stockholders' Equity | $254,779 | $245,850 | +$8,929 | Consolidated Statements of Income The consolidated statements of income provide a detailed breakdown of Hudson Technologies' financial performance for the three and six months ended June 30, 2025, showing revenues, cost of sales, gross profit, operating expenses, and net income compared to the corresponding periods in 2024 | Income Statement Item (in thousands) | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :--------------------------------- | :------ | :------ | :------ | :------ | | Revenues | $72,849 | $75,282 | $128,192 | $140,532 | | Cost of sales | $50,038 | $52,711 | $93,313 | $96,540 | | Gross profit | $22,811 | $22,571 | $34,879 | $43,992 | | Selling, general and administrative | $9,265 | $9,013 | $17,435 | $16,960 | | Operating income | $12,724 | $12,798 | $15,799 | $25,574 | | Income before income taxes | $13,375 | $12,646 | $17,026 | $25,208 | | Income tax expense | $3,207 | $3,061 | $4,100 | $6,061 | | Net income | $10,168 | $9,585 | $12,926 | $19,147 | | Net income per diluted share | $0.23 | $0.20 | $0.28 | $0.40 | Consolidated Statements of Cash Flows For the six months ended June 30, 2025, cash provided by operating activities decreased to $20.6 million from $40.8 million in the prior year, largely due to changes in working capital. Cash used in investing activities significantly reduced to $1.9 million due to the absence of acquisition payments, while cash used in financing activities increased to $4.5 million, primarily for common share repurchases | Cash Flow Item (in thousands) | H1 2025 | H1 2024 | Change | | :---------------------------- | :------ | :------ | :----- | | Net income | $12,926 | $19,147 | -$6,221 | | Cash provided by operating activities | $20,569 | $40,835 | -$20,266 | | Cash used in investing activities | ($1,875) | ($22,755) | +$20,880 | | Cash used in financing activities | ($4,535) | ($2) | -$4,533 | | Increase in cash and cash equivalents | $14,159 | $18,078 | -$3,919 | | Cash and cash equivalents at end of period | $84,293 | $30,524 | +$53,769 | - The decrease in cash from operating activities was significantly influenced by changes in trade accounts receivable and inventories[20] - Cash used in investing activities decreased substantially due to no payments for acquisitions in H1 2025, compared to $20.7 million in H1 2024[20] - Cash used in financing activities was primarily driven by $4.5 million in common share repurchases during H1 2025[20] Supplementary Information This section provides additional context, including details on the Q2 2025 conference call, a safe harbor statement for forward-looking information, and investor relations contact details Conference Call Information Hudson Technologies hosted a conference call and webcast on July 30, 2025, to discuss its second quarter 2025 results, with a replay available for access until August 29, 2025 - A conference call and webcast were held on Wednesday, July 30, 2025, at 5:00 p.m. Eastern Time to discuss Q2 2025 results[9] - A replay of the teleconference is available until August 29, 2025, accessible via dial-in with conference ID: 52624[10] Safe Harbor Statement This section serves as a cautionary note regarding forward-looking statements within the report, highlighting that actual results may differ materially due to various known and unknown risks and uncertainties, including regulatory changes, market conditions, and economic factors - Statements not based on historical facts are forward-looking and involve risks, uncertainties, and other factors that could cause actual results to differ materially[13] - Key factors include changes in laws/regulations, demand/price for refrigerants, sourcing ability, seasonality, competition, litigation, and economic conditions[13] - Readers are cautioned against undue reliance on these statements, which are valid only as of the date they were made[13] Investor Relations Contact Contact information is provided for investor relations inquiries, including both the external investor relations firm and the company's President & CEO - Investor Relations Contact: John Nesbett/Jennifer Belodeau at IMS Investor Relations, (203) 972-9200, hudson@imsinvestorrelations.com[14] - Company Contact: Brian F. Coleman, President & CEO, Hudson Technologies, Inc., (845) 735-6000, bcoleman@hudsontech.com[14]