WOODCLIFF LAKE, NJ – MARCH 8, 2023 – Hudson Technologies, Inc. (NASDAQ: HDSN) announced results for the fourth quarter and year ended December 31, 2022.
For the quarter ended December 31, 2022, Hudson reported revenues of $47.4 million, an increase of 26% compared to revenues of $37.8 million in the comparable 2021 period. Fourth quarter revenue growth was driven by increased selling prices for certain refrigerants during the period as well as increased sales volume in the quarter as compared to the fourth quarter of 2021. Gross margin in the fourth quarter of 2022 was 32%, compared to 45% in the fourth quarter of 2021. Hudson reported operating income of $7.1 million in the fourth quarter of 2022, compared to operating income of $9.3 million in the prior year period. The Company recorded net income of $5.1 million or $0.11 per basic and diluted share in the fourth quarter of 2022, compared to net income of $6.2 million or $0.14 per basic and $0.13 diluted share in the same period of 2021.
For the year ended December 31, 2022, Hudson reported revenues of $325.2 million, an increase of 69% compared to revenues of $192.7 million for full year 2021. The revenue growth was driven by increased selling prices for certain refrigerants during the period. Gross margin for full year 2022 was 50%, compared to gross margin of 37% in the prior year period. The margin increase is primarily related to higher selling prices for certain refrigerants for 2022 when compared to 2021. Hudson reported operating income of $131.5 million for full year 2022 compared to operating income of $42.3 million in the prior year. The Company recorded net income of $103.8 million or $2.31 per basic and $2.20 per diluted share in 2022, compared to a net income of $32.3 million or $0.74 per basic and $0.69 diluted share in 2021.
Hudson reduced total outstanding debt from $94.9 million at December 31, 2021 to $46.8 million at December 31, 2022. Stockholders’ equity improved to $175.0 million at December 31, 2022 as compared to $70.9 million at December 31, 2021.
Brian F. Coleman, President and Chief Executive Officer of Hudson Technologies commented,
“2022 was a tremendous year for Hudson as evidenced by record revenues, and enhanced profitability. We delivered a solid fourth quarter consistent with historical fourth quarter performance, which is typically our lowest revenue quarter because it falls outside of our nine-month selling season. During the fourth quarter of 2022, gross margin fell just below our long-range target gross margin of 35%, but we do not believe this slightly lower fourth quarter gross margin will affect our long-term target. With the enhanced profitability and strong free cash flow achieved in 2022, we substantially reduced our total outstanding debt from approximately $95 million at year-end 2021, to $47 million at year-end 2022. The success of our operational execution allowed us to strengthen our balance sheet, providing improved financial flexibility as we begin moving through 2023.
“We remain optimistic that the ongoing stepdown in HFC production and consumption allowances mandated by the AIM Act will benefit our business. The 10% stepdown in virgin production and consumption that began in 2022 remains in place for 2023, as we track toward a 40% baseline reduction beginning in 2024. As we’ve previously mentioned, we believe the current phasedown schedule will drive higher demand for our reclaimed refrigerants as virgin HFCs become increasingly scarce. Likewise, we are encouraged by legislation at both the federal and state levels that promotes the use of reclaimed refrigerant.
“Hudson has held a leadership role in the refrigerant industry for more than thirty years, and we have long been committed to developing sustainable solutions around responsible refrigerant management and the adoption of reclamation. We are uniquely positioned to leverage our expertise and industry-leading reclamation technology to help drive the transition to more efficient cooling equipment and greener refrigerants, while also servicing the existing installed base with reclaimed refrigerants as the industry continues to evolve,” Mr. Coleman concluded.
