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Hudson Technologies Reports Financial Results for the Second Quarter of 2011

PEARL RIVER, N.Y. - (BUSINESS WIRE) - Hudson Technologies, Inc. (NASDAQ: HDSN), announced results for the second quarter and six months ended June 30, 2011.

Revenues for the three months ended June 30, 2011 decreased 8% to $14,712,000 from $16,053,000 in the comparable 2010 period; the comparable quarter last year was a particularly high revenue quarter for the Company. Hudson reported gross profit margins of 18% for the second quarter of 2011 compared to 23% in the second quarter last year. The Company also reported a net profit of $781,000, or $.03 per basic and diluted share for the second quarter of 2011, compared to a net profit of $1,327,000, or $0.06 per basic and diluted share, for the second quarter of 2010.

For the six months ended June 30, 2011, revenues increased 13.5% to $28,530,000 as compared to revenues of $25,137,000 in the first six months of 2010. Gross profit margins increased in the first half of 2011 to 22% compared to 19% in the first half of 2010. The Company reported a net profit of $1,869,000, or $0.08 per basic share and $0.07 per diluted share in the first six months of 2011 compared to net income of $1,057,000 or $0.05 per basic and diluted share in the first six months of 2010.

Kevin J. Zugibe, Chairman and Chief Executive Officer of Hudson Technologies commented, "Overall, we're pleased with our results for the first half of 2011, which demonstrate the revenue growth and net income growth that we've historically reported. Unfortunately, the EPA phase out of R-22 refrigerants has not yet brought about the price increases in R-22 that will drive the demand for reclaimed refrigerants. There is clearly an oversupply of R-22, which could be due to a variety of reasons, including the economic downturn and its corresponding effect on the EPA projections for aftermarket demand, as well as stockpiling. That being said, this is a five-year process and the EPA has recently begun to implement revisions to the existing phase out regulations. We remain confident that, over time, Hudson will see the desired supply/demand imbalance that should positively impact the market opportunity for our R-22 reclaim business.

"For the six months ended June 30, 2011, we recognized 13.5% growth in revenues, and a $.03 per basic share improvement in our earnings when compared to last year's cooling season. In the 2011 refrigerant sales season, we have again experienced double digit revenue growth. Within the first and second quarters of this year's season we saw a more traditional buying pattern than that of last year. In 2010 we saw lighter than normal refrigerant sales volume in the first quarter as customers held off on purchasing refrigerant and conserved their cash in a recovering economy. Consequently, in the second quarter of 2010 we saw record revenues as warmer summer weather arrived and customers began servicing their chilling and refrigeration systems. We believe the sequential growth we achieved between the first and second quarters is indicative of a return to more historical buying behavior from our customers, reinforcing our view that our refrigerant sales season, typically comprises the first half of the year.

"Subsequent to the close of the quarter, we announced the formation of a joint venture, Hudson Technologies Europe S.r.l., for the development of reclamation, remediation and energy optimization services throughout most of Europe, the Middle East and North Africa. With the strict regulatory environment and high energy prices in Europe, there is growing demand for energy saving solutions for commercial steam, air conditioning and refrigeration systems. Hudson's ability to identify and capture efficiencies and savings for these systems position us to establish Hudson's products and services and grow market share in these new geographies. Likewise, we see an opportunity to grow our reclamation business through the new joint venture by taking advantage of Europe's accelerated refrigerant phase out schedule which has completely phased out the production of R-22 refrigerants, so that existing R-22 systems can only be serviced with reclaimed or recycled refrigerant. Finally, Hudson Technologies Europe's reclamation efforts provide us access to the ozone depleting gases that have high value in the carbon credit market, a market that is significantly more active in Europe than in the United States.

"We are at a very exciting juncture in the development of our business and remain focused on our efforts to drive revenue and earnings growth across our broad product and services offerings while also growing market share by bringing our capabilities to new markets. As we expand our customer base we are also committed to enhancing our relationships with existing customers, with the goal of creating sustainable revenue growth."

CONFERENCE CALL INFORMATION

The Company will host a conference call to discuss the second quarter results today, August 4, 2011 at 10:00 A.M. Eastern Time.

To access the live webcast log onto the Hudson Technologies website at www.hudsontech.com and click on "Investor Relations" .

To participate in the call by phone, dial (877) 407-9205 approximately five minutes prior to the scheduled start time. International callers please dial (201) 689-8054.

A replay of the webcast will be available until August 11, 2011 and may be accessed by dialing (877) 660-6853 and international callers may dial (201) 612-7415. Callers should use account number 286 and pass code 375821.

About Hudson Technologies

Hudson Technologies, Inc. is a leading provider of innovative solutions to recurring problems within the refrigeration industry. Hudson's proprietary RefrigerantSide Services increase operating efficiency and energy savings, and remove moisture, oils and other contaminants frequently found in the refrigeration circuits of large comfort cooling and process refrigeration systems. Performed at a customer's site as an integral part of an effective scheduled maintenance program or in response to emergencies, RefrigerantSide Services offer significant savings to customers due to their ability to be completed rapidly and at higher purity levels, and can be utilized while the customer's system continues to operate. In addition, the Company sells refrigerants and provides traditional reclamation services to the commercial and industrial air conditioning and refrigeration markets. For further information on Hudson, please visit the Company's web site at www.hudsontech.com.

Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995

Statements contained herein which are not historical facts constitute forward-looking statements. Such forward-looking statements involve a number of known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Such factors include, but are not limited to, changes in the markets for refrigerants (including unfavorable market conditions adversely affecting the demand for, and the price of, refrigerants), the Company's ability to source refrigerants, regulatory and economic factors, seasonality, competition, litigation, the nature of supplier or customer arrangements which become available to the Company in the future, adverse weather conditions, possible technological obsolescence of existing products and services, possible reduction in the carrying value of long-lived assets, estimates of the useful life of its assets, potential environmental liability, customer concentration, the ability to obtain financing, risks associated with the Company's joint venture which include the ability of the parties to perform their obligations under the joint venture agreement, any delays or interruptions in bringing products and services to market, the timely availability of any requisite permits and authorizations from governmental entities and third parties as well as factors relating to doing business outside the United States, including changes in the laws, regulations, policies, and political, financial and economic conditions, including inflation, interest and currency exchange rates, of countries in which the joint venture may seek to conduct business, and other risks detailed in the Company's periodic reports filed with the Securities and Exchange Commission. The words "believe", "expect", "anticipate", "may", "plan", "should" and similar expressions identify forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date the statement was made.

Hudson Technologies, Inc. and subsidiaries

Consolidated Balance Sheets

(Amounts in thousands, except for share and par value amounts)

		June 30, 2011		December 31, 2010
		(unaudited)
Assets
Current assets:
Cash and cash equivalents		$ 2,921		$ 3,926
Trade accounts receivable - net of allowance for doubtful
accounts of $225 and $220		8,946		1,767
Inventories		13,814		18,211
Prepaid expenses and other current assets		488		376
Total current assets		26,169		24,280
Property, plant and equipment, less accumulated depreciation and amortization		2,916		3,008
Other assets		79		66
Deferred tax assets - net		2,545		3,669
Intangible assets, less accumulated amortization		81		73
Total Assets		$31,790		$31,096
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable and accrued expenses		$ 2,894		$ 6,350
Accrued payroll		250		693
Short-term debt and current maturities of long-term debt		8,700		5,012
Total current liabilities		11,844		12,055
Long-term debt, less current maturities		135		1,018
Total Liabilities		11,979		13,073
Commitments and contingencies
Stockholders' equity:
Preferred stock shares authorized 5,000,000
Series A Convertible Preferred stock, $0.01 par value ($100
liquidation preference value); shares authorized 150,000 ; none issued or outstanding		--		--
Common stock, $0.01 par value; shares authorized 50,000,000;
23,780,606 issued and outstanding		238		238
Additional paid-in capital		42,807		42,887
Accumulated deficit		(23,234)		(25,102)
Total Stockholders' Equity		19,811		18,023
Total Liabilities and Stockholders' Equity		$31,790		$31,096

Hudson Technologies, Inc. and subsidiaries

Consolidated Income Statements

(unaudited)

(Amounts in thousands, except for share and per share amounts)

		Three month period ended June 30,				Six month period ended June 30,
		2011		2010		2011		2010
Revenues		$14,712		$16,053		$28,530		$25,137
Cost of sales		12,005		12,356		22,121		20,263
Gross Profit		2,707		3,697		6,409		4,874
Operating expenses:
Selling and marketing		455		499		1,098		1,004
General and administrative		723		757		1,792		1,592
Total operating expenses		1,178		1,256		2,890		2,596
Operating income		1,529		2,441		3,519		2,278
Other income (expense):
Interest expense		(274)		(301)		(517)		(573)
Interest income		4		--		12		--
Total other income (expense)		(270)		(301)		(505)		(573)
Income before income taxes		1,259		2,140		3,014		1,705
Income tax expense		478		813		1,145		648
Net income		$ 781		$1,327		$1,869		$1,057
Net income per common share - Basic		$0.03		$0.06		$0.08		$0.05
Net income per common share - Diluted		$0.03		$0.06		$0.07		$0.05
Weighted average number of shares
outstanding - Basic		23,780,606		20,986,339		23,780,606		20,966,939
Weighted average number of shares
outstanding - Diluted		24,989,119		22,573,109		25,082,275		22,553,709

Investor Relations:
Institutional Marketing Services (IMS)
John Nesbett/Jennifer Belodeau, 203-972-9200
jnesbett@institutionalms.com
or
Hudson Technologies, Inc.
Brian F. Coleman, 845-735-6000
President & COO
bcoleman@hudsontech.com