Hudson Technologies(US:HDSN)2021-08-11 21:01Financial 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].