<PAGE>
================================================================================
Securities and Exchange Commission
Washington, D.C. 20549
Form 10-QSB
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1997
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ____________ to ____________
Commission file number 1-13412
---------------------
Hudson Technologies, Inc.
---------------------
(Exact name of small business issuer as specified in its charter)
New York 13-3641539
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification number)
25 Torne Valley Road
Hillburn, New York 10931
(address of principal executive offices) (ZIP Code)
Issuer's telephone number, including area code:
(914) 368-4990
------------
Indicate by check mark whether the issuer (1) has filed all reports
required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of
1934 during the preceding twelve months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the last 90 days.
YES X NO
--- ---
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date:
Common stock, $0.01 par value 5,065,820 shares
- ----------------------------- ----------------
Class Outstanding at October 31, 1997
================================================================================
<PAGE>
Hudson Technologies, Inc.
Index
<TABLE>
<CAPTION>
Part I. Financial Information Page Number
- ------- --------------------- -----------
<S> <C> <C>
Item 1
Consolidated Balance Sheets 2
Consolidated Statements of Operations 3
Consolidated Statements of Cash flows 4
Notes to the Consolidated Financial statements 5
Item 2
Management's Discussion and Analysis of Financial
Condition and Results of Operations 8
Part II. Other information
Item 1 - Legal proceedings 11
Item 6 - Exhibits and Reports on Form 8-K 11
Signatures 12
</TABLE>
<PAGE>
Part I - Financial Information
Hudson Technologies, Inc. and subsidiaries
Consolidated Balance Sheets
(Amounts in thousands, except for share amounts)
<TABLE>
<CAPTION>
Balance as of: September 30, December 31,
------------- ------------
1997 1996
---- ----
(unaudited)
<S> <C> <C>
Assets
Current assets:
Cash and cash equivalents $ 668 $422
Trade accounts receivable; net of allowance
for doubtful accounts of $429 and $546 4,340 2,476
Inventories 4,299 9,062
Income taxes receivable 203 930
Prepaid expenses and other current assets 234 141
------- -------
Total current assets 9,744 13,031
Property, plant and equipment, less accumulated depreciation 6,202 5,882
Goodwill and intangible assets, less accumulated amortization 7,412 7,754
Deferred income taxes 1,949 1,978
Other assets 104 130
------- -------
Total assets $25,411 $28,775
======= =======
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable and accrued expenses $3,005 $2,762
Short term debt; including loans from officers and
stockholders of none and $202 2,299 5,678
Reserve for restructuring 250 377
------- -------
Total current liabilities 5,554 8,817
Deferred income 61 71
Long-term debt, less current maturities 1,249 1,509
------- -------
Total liabilities 6,864 10,397
------- -------
Commitments and contingencies
Stockholders' equity:
Common stock, $0.01 par value; shares authorized
20,000,000; issued 5,086,820 and 4,370,495; and
outstanding 5,065,820 and 4,349,495 51 44
Additional paid-in capital 22,683 18,517
Retained deficit (4,014) (10)
------- -------
18,720 18,551
Less: Treasury stock, 21,000 shares at cost (173) (173)
Total Stockholders' equity 18,547 18,378
------- -------
Total liabilities and Stockholders' equity $25,411 $28,775
======= =======
- --------------------------------------------------------------------------
</TABLE>
Certain 1996 amounts have been reclassified to conform to 1997 presentation
format. See accompanying Notes to the Consolidated Financial Statements.
2
<PAGE>
Hudson Technologies, Inc. and subsidiaries
Consolidated Statements of Operations
(Unaudited)
(In thousands, except for share and per share amounts)
<TABLE>
<CAPTION>
Three month Nine month
periods ended periods ended
September 30, September 30,
------------- -------------
1997 1996 1997 1996
---- ---- ---- ----
<S> <C> <C> <C> <C>
Revenues $6,960 $5,919 $20,459 $15,126
Cost of Sales 5,365 3,843 16,785 9,982
Inventory writedown to net realizable value - - 983 -
--------- --------- --------- ---------
Gross Profit 1,595 2,076 2,691 5,144
Operating expenses:
Selling and marketing 350 448 1,248 930
General and administrative 1,205 884 3,962 2,596
Restructuring Reserve - - - 1,333
Depreciation and amortization 380 393 1,041 876
--------- --------- --------- ---------
Total operating expenses 1,935 1,725 6,251 5,735
--------- --------- --------- ---------
(Loss) Income from Operations (340) 351 (3,560) (591)
Other income (expense):
Interest income - 3 - 42
Interest expense (166) (8) (524) (91)
Other income 26 - 80 26
--------- --------- --------- ---------
Total other income (expense) (140) (5) (444) (23)
(Loss) Income before income taxes (480) 346 (4,004) (614)
(Benefit) Provision for income taxes - 140 - (202)
--------- --------- --------- ---------
Net (Loss) Income $ (480) $ 206 $(4,004) $(412)
--------- --------- --------- ---------
- --------------------------------------------
Net (loss) income per common share $(0.09) $ .05 $(0.81) $(.09)
--------- --------- --------- ---------
Weighted average number of shares outstanding 5,065,820 4,477,580 4,961,677 4,611,676
--------- --------- --------- ---------
Net (loss) income per common share- assuming dilution $ (0.09) $ .05 $(0.81) $(.09)
--------- --------- --------- ---------
Weighted average number of shares outstanding- assuming dilution 5,065,820 4,477,580 4,961,677 4,611,676
--------- --------- --------- ---------
- --------------------------------------------
</TABLE>
Certain 1996 amounts have been reclassified to conform to 1997 presentation
format. See accompanying Notes to the Consolidated Financial Statements.
3
<PAGE>
Hudson Technologies, Inc. and subsidiaries
Consolidated Statements of Cash Flows
(unaudited)
(In thousands)
<TABLE>
<CAPTION>
For the nine month
periods ended
September 30,
------------------
1997 1996
---- ----
<S> <C> <C>
Cash flows from operating activities:
Net loss $(4,004) $(412)
Adjustments to reconcile net loss to cash
provided by (used by) operating activities:
Depreciation and amortization 1,041 875
Deferred income taxes 29 (18)
Allowance for doubtful accounts 87 -
Decrease (increase) in trade receivables (1,951) (484)
Decrease (increase) in inventories 4,764 (4,338)
Decrease (increase) in income taxes receivable 727 (252)
Decrease (increase) in prepaid and other current assets (131) (114)
Decrease (increase) in other assets 25 (132)
Increase (decrease) in accounts payable and accrued expenses 243 (198)
Increase (decrease) in deferred income (10) -
Increase (decrease) in reserve for restructuring (127) 1,000
------- -------
Cash provided by (used by) operating activities 693 (4,073)
------- -------
Cash flows from investing activities:
Proceeds from sale of marketable securities - 1,100
Additions to property, plant, and equipment ( 982) (2,301)
Acquisitions accounted for as purchases - (2,716)
------- -------
Cash used by investing activities ( 982) (3,917)
------- -------
Cash flows from financing activities:
Proceeds from redemption of warrants - 265
Proceeds from issuance of stock 4,173 -
Proceeds from short-term bank borrowings - 2,686
Proceeds from convertible debt issue - 5,300
Repayment of debt (3,638) (2,057)
Purchase of treasury stock - (145)
------- -------
Cash provided by financing activities 535 6,049
------- -------
Increase (decrease) in cash and cash equivalents 246 (1,941)
Cash and equivalents at beginning of period 422 2,460
------- -------
Cash and equivalents at end of period $668 $519
==== ====
- -------------------------------------------------------------------------------
Supplemental Disclosure of Cash Flow Information:
Cash Paid for Interest $524 $ 91
Cash Paid for Taxes $ - $ 69
- -------------------------------------------------------------------------------
</TABLE>
Certain 1996 amounts have been reclassified to conform to 1997 presentation
format. See accompanying Notes to the Consolidated Financial Statements.
4
<PAGE>
Hudson Technologies, Inc. and subsidiaries
Notes to Consolidated Financial Statements
General
Hudson Technologies, Inc., incorporated under the laws of New York on January
11, 1991, together with its subsidiaries (collectively, "Hudson" or the
"Company"), provides products and technical services related to the recovery
and reclamation of refrigerants used in commercial air conditioning and
refrigeration systems. The Company's services have been developed to
facilitate compliance with the Federal Clean Air Act as amended in 1990, which
prohibits the venting, and requires the recovery, of specified
chlorofluorocarbon ("CFCs") and hydrochlorofluorocarbon ("HCFCs")
refrigerants.
Note 1- Summary of Significant Accounting Policies
The accompanying unaudited financial statements have been prepared in
accordance with generally accepted accounting principles for interim financial
statements and with the instructions of Regulation SB. Accordingly, they do
not include all the information and footnotes required by generally accepted
accounting principles for complete financial statements. The financial
information included in the quarterly report should be read in conjunction
with the Company's audited financial statements and related notes thereto for
the year ended December 31, 1996.
In the opinion of management, all estimates and adjustments considered
necessary for a fair presentation have been included and all such adjustments
were normal and recurring.
Consolidation
The consolidated financial statements represent all companies of which Hudson
directly or indirectly has majority ownership or otherwise controls.
Significant intercompany accounts and transactions have been eliminated. The
Company's consolidated financial statements include the accounts of wholly
owned subsidiaries Hudson Technologies Company [formerly named Refrigerant
Reclamation Corporation of America, Inc. ("RRCA")] and Environmental Support
Solutions, Inc. ("ESS"), together with other controlled affiliates.
Reclassifications
Certain 1996 amounts have been reclassified to conform with 1997 presentation
format. Amounts reclassified had no impact on consolidated operating loss or
net loss.
Fair value of Financial Instruments
The carrying values of financial instruments including trade accounts
receivable, and accounts payable approximate fair value at September 30, 1997
and December 31, 1996, because of the relatively short maturity of these
instruments. The carrying value of short-and long-term debt approximates fair
value at September 30, 1997 and December 31, 1996, based upon quoted market
rates of similar debt issues. The fair value of officer and shareholder notes
cannot be determined due to the nature of the transactions.
5
<PAGE>
Hudson Technologies, Inc. and subsidiaries
Notes to Consolidated Financial Statements
Credit Risk
Financial instruments, which potentially subject the Company to concentrations
of credit risk, consist principally of temporary cash investments and trade
accounts receivable. The Company maintains its temporary cash investments in
highly rated financial institutions. The Company's trade accounts receivables
are due from companies throughout the U.S. The Company reviews each customer's
credit history before extending credit. The Company establishes an allowance
for doubtful accounts based on factors associated with the credit risk of
specific accounts, historical trends, and other information.
Revenue and cost of sales
Revenues are recorded upon completion of service, product shipment or passage
of title to customers in accordance with contractual terms. Cost of sales is
recorded based on the cost of products shipped or services performed and
related direct operating costs of the Company's reclamation sites.
Cash and cash equivalents
Temporary investments with original maturities of ninety days or less are
considered cash and cash equivalents.
Inventories
Inventories, consisting primarily of reclaimed refrigerant products available
for sale, are stated at the lower of cost, on a first-in first-out basis, or
market. Market value is based on net realizable value.
Property, plant, and equipment
Property, plant, and equipment are stated at cost; including internally
manufactured equipment. Provision for depreciation is recorded (for financial
reporting purposes) using the straight-line method over the useful lives of
the respective assets. Leasehold improvements are amortized on a straight-line
basis over the shorter of economic life or terms of the respective leases.
Due to the specialized nature of the Company's business, it is possible that
the Company's estimate of equipment useful life may change in the future.
Goodwill and intangible assets
Goodwill is amortized over 25 years using the straight-line method. Other
intangible assets consisting primarily of patents or acquired contract rights
are amortized on a straight-line basis over the remaining life of the asset.
Income taxes
Hudson utilizes the assets and liability method for recording deferred income
taxes, which provides for the establishment of deferred tax asset or liability
accounts based on the difference between tax and financial reporting bases of
certain assets and liabilities, based upon statutory tax rates enacted for
future periods.
Treasury stock
Common stock acquired by the Company is carried at acquisition cost (market
price at acquisition date).
Loss per common and equivalent shares
During February 1997, the FASB issued SFAS No. 128 `Earnings Per Share', which
replaces the presentation of primary earnings per share (`EPS'), with basic
EPS. It also requires dual presentation of basic and diluted EPS.The Company
adopted SFAS No. 128 as of January 1, 1997. The 1996 loss per share has been
restated to conform to SFAS No. 128.
6
<PAGE>
Hudson Technologies, Inc. and subsidiaries
Notes to Consolidated Financial Statements
Estimates and Risks
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions
that affect reported amounts of certain assets and liabilities, the disclosure
of contingent assets and liabilities, and the results of operations during the
reporting period. Actual results could differ from these estimates. The
Company operates in an industry that is highly regulated, changes in which
could affect operating results. The Company purchases unprocessed refrigerants
from domestic suppliers and its customers. The Company's inability to obtain
refrigerants on commercially reasonable terms or a decline in demand for
refrigerants could cause delays in refrigerant processing, possible loss of
revenues, and could materially adversely affect operating results.
Note 2 - Capital Transactions
During January 1997, in connection with the execution of various agreements
with E.I. DuPont DeNemours and Company ("DuPont"), the Company sold 500,000
shares of common stock for $3.5 million to an affiliate of DuPont. Proceeds
from the sale were primarily utilized to retire debt.
During January 1997, certain then outstanding convertible debentures were
converted into 133,085 shares of common stock.
During 1997, certain officers and other stock option holders exercised options
to purchase an aggregate of 83,240 shares of common stock. The Company
received proceeds of approximately $452,000 and such proceeds were used for
working capital purposes.
7
<PAGE>
Hudson Technologies, Inc. and subsidiaries
Management's Discussion and Analysis of Financial Condition
And Results of Operations
The statements contained in this report which are not historical facts are
forward looking statements that involve risks and uncertainties, including but
not limited to, changes in the markets for refrigerants (including unfavorable
market conditions adversely affecting the demand for, and the price of,
refrigerants), regulatory and economic factors, increased competition, the
nature of supplier or customer arrangements which become available to the
Company in the future, adverse weather conditions, technological obsolescence
and potential environmental liability. The Company's actual results may differ
materially from the results discussed in any forward looking statement.
Results of Operations
Three months ended September 30, 1997
Revenues totaled $6,960,000, an increase of $1,041,000 or 18% from the
$5,919,000 reported during the prior comparable 1996 period. The increase was
attributable to an increase in refrigerant product sales.
Cost of sales totaled $5,365,000, an increase of $1,522,000 or 40% from
the $3,843,000 reported during the comparable prior year period due mainly to
higher refrigerant product cost. As a percentage of sales, cost of sales were
77 % of revenues for the three-month period ended September 30, 1997, an
increase from the 65% reported for the comparable 1996 period. The increase in
cost of sales in both dollars and percentage of revenues was attributable
primarily to a change in product mix with a higher volume of lower margin
refrigerant product sales occurring during the 1997 period.
Operating expenses totaled $1,935,000, an increase of $210,000 or 12%
from the $1,725,000 reported during the comparable 1996 period. The increase
was attributable to an increase in the number of employees and related
expenses.
Net loss totaled $480,000, for the three months ended September 30,
1997, as compared to net income of $206,000 reported during the comparable
prior year period. The loss was attributable mainly to lower gross profits on
refrigerant sales and an increase in operating expenses.
Nine months ended September 30, 1997
Revenues totaled $20,459,000, an increase of $5,333,000 or 35% from the
$15,126,000 reported during the comparable 1996 period. The increase was
attributable primarily to the increase in refrigerant product sales.
Cost of sales totaled $17,768,000, an increase of $7,786,000 or 78% from
the $9,982,000 reported during the comparable prior year period. As a
percentage of sales, cost of sales were 87% of revenues for the nine-month
period ended September 30, 1997, an increase from the 66% reported for the
comparable prior year period. The increase in both dollars and percentage of
revenues was attributable primarily to a higher volume of lower margin
refrigerant product sales and the reduction of inventory values in the second
quarter by $983,000 to net realizable value.
Operating expenses totaled $6,251,000, an increase of $516,000 or 9%
from the $5,735,000 during the comparable 1996 period. The increase was
attributable to the Company's acquisitions (namely ESS and GRR Co., Inc.) and
the increase in the number of employees and related expenses offset by the
lack of a restructuring reserve in 1997.
Net loss totaled $4,004,000, an increase of $3,592,000 from the $412,000
net loss reported during the 1996 period. The increase was attributable mainly
to lower gross profits on refrigerant sales, the reduction of inventory values
to net realizable value and an increase in operating expenses.
8
<PAGE>
Hudson Technologies, Inc. and subsidiaries
Management's Discussion and Analysis of Financial Condition
And Results of Operations (continued)
Liquidity and Capital Resources
Net cash provided by operating activities totaled $693,000 for the nine months
ended September 30, 1997 compared with a net cash usage of $4,073,000 for the
prior year comparable period. Net cash provided by operating activities was
attributable mainly to the reduction of inventories, partially offset by an
increase in net loss and trade accounts receivable.
Net cash used in investing activities was $982,000 for the nine months ended
September 30, 1997, compared with net cash usage of $3,917,000 for the prior
comparable period. The decrease in net cash usage of $2,935,000 was
attributable to the non-recurrence of the 1996 acquisitions and a reduction in
equipment additions.
Net cash provided by financing activities totaled $535,000 for the nine months
ended September 30, 1997 and consisted mainly of issuance of common shares to
DuPont ($3.5 million) offset by retirement of debt ($3.1 million). Net cash
provided by financing activities totaled $6,049,000 for the nine-month period
ended September 30, 1996 and consisted mainly of proceeds of $5,300,000 from
the issuance of convertible debt.
At September 30, 1997, the Company reported cash and equivalents of $668,000.
On May 10, 1996, the Board of Directors authorized the Company to acquire,
from publicly traded markets, a maximum of 25,000 issued and outstanding
shares of its own Common Stock. As of December 31, 1996, the Company had
repurchased 21,000 shares at an average price of $8.25 per share. No
repurchases were made during 1997.
On June 18, and September 30, 1996, the Company issued Convertible Debentures
with a combined face value of $5.3 million. These debentures were retired or
converted to common stock during January 1997.
On July 24, 1996, the Company completed the acquisition of GRR Co., Inc. in
consideration of the issuance of 20,000 unregistered shares of the Company's
Common stock.
In connection with its bankruptcy reorganization in June 1994, prior to its
acquisition by Hudson, RRCA has obligations (as modified by a settlement
during April 1996) totaling $268,000 at September 30, 1997 payable in periodic
payments to bankruptcy creditors through July 2000.
On November 14, 1996, certain officers and stockholders of Hudson granted
unsecured loans ($678,000) to the Company; repayable upon receipt of proceeds
from property mortgage (see below) or on subsequent demand. On January 29,
1997, the Company repaid the officer loans and accrued interest outstanding.
During 1996, the Company mortgaged its property and building located in Ft.
Lauderdale with Turnberry Savings Bank, NA. The mortgage ($691,000 at
September 30, 1997) bears a fixed annual interest rate of 9.25% and is
repayable over 20 years commencing February 1997.
9
<PAGE>
Hudson Technologies, Inc. and subsidiaries
Management's Discussion and Analysis of Financial Condition
and Results of Operations (continued)
During January 1997, in connection with the execution of various agreements
with E.I. DuPont de Nemours ("DuPont"), the Company obtained additional equity
funds ($3.5 million) from an affiliate of DuPont. Proceeds from this funding
were utilized primarily to retire debt.
During January 1997, the Company entered into an agreement to purchase a
29,000 square foot facility on 5.15 acres in Congers, New York for
approximately $1.4 million; subject to approvals and ability to obtain
financing. The Company is leasing the facility in the interim period.
During May 1997, certain officers and stockholders of the Company granted
unsecured loans in the aggregate of $585,000 to the Company. Such loans were
due on demand and bore interest from 8.0% to 8.88%. On August 12, 1997, the
Company repaid the officers loans and outstanding interest.
The Company has a bank line of credit ($3.0 million) with MTB Bank N.A.
('MTB'), which bears interest at a rate of prime plus 2%. Advances under the
MTB line ($1,952,000 at September 30, 1997) were limited to 85% of eligible
trade accounts receivable and 50% of inventories not exceeding trade
receivable lending limits or $1.5 million. Substantially all the Company's
assets are pledged as collateral to MTB Bank. The Company was in compliance
with all terms of the MTB Bank agreement at September 30, 1997. The agreement
expires February 15, 1998.
At September 30, 1997, the Company had working capital of approximately
$4,190,000. Working capital consists principally of inventory. The Company's
ability to sell its inventory and the prices at which it can be sold is
subject to current market conditions. The Company has historically financed
its working capital requirements through cash flows from operations, the
issuance of debt and equity securities, bank borrowings and loans from
officers. Presently, the Company does not have significant availability under
its line of credit, which expires on February 15, 1998. The Company is seeking
to implement an expanded bank credit line; however, there is no assurance that
any financing will be available to the Company. Failure to obtain financing
could have a material adverse affect on the Company's financial condition and
results of operations.
Reliance on Suppliers
The Company's financial performance is in part dependent on its ability to
obtain sufficient quantities of domestic virgin and reclaimable refrigerants
from manufacturers, wholesalers, distributors, bulk gas brokers, and from
other sources; and on corresponding demand for reclaimed refrigerants. To the
extent that the Company is unable to obtain sufficient quantities of
refrigerants in the future, or resell reclaimed refrigerants at a profit, the
Company's financial condition and results of operations would be materially
adversely affected.
During January 1997, the Company entered into agreements with DuPont to market
DuPont's SUVA(TM) refrigerants. Under the agreement, 95% of virgin
refrigerants provided to specified market segment customers must be purchased
from DuPont.
Seasonality and Fluctuations in Operating Results
The Company's operating results vary from period to period as a result of
weather conditions, requirements of potential customers, availability and
price of refrigerant products (virgin or reclaimable), changes in reclamation
technology, timing in introduction and / or retrofit of CFC-based
refrigeration equipment by domestic users of refrigerants, the rate of
expansion of the Company's operations, and by other factors. The Company's
business has historically been seasonal in nature with peak sales of
refrigerants occurring in the first half of each year. However, the second
quarter of 1997 was adversely impacted, in part, to the unseasonably cool
weather. Unforeseen events, including the delays in securing adequate supplies
of refrigerants at peak demand periods,
10
<PAGE>
PART II. OTHER INFORMATION
Hudson Technologies, Inc. and subsidiaries
lack of refrigerant demand, or declining refrigerant prices, regulatory and
economic factors, increased competition, adverse weather conditions,
technological obsolescence and potential environmental liability could result
in significant fluctuations in the Company's operating results or losses.
There can be no assurance that the foregoing factors will not result in
material adverse affect of the Company's financial condition and results of
operations.
Item 1. Legal Proceedings
During June 1995, United Water of New York Inc. ("United") alleged that it
discovered that two of its wells within close proximity to the Company's
facility showed elevated levels of refrigerant contamination. During June
1996, United notified the Company that it was seeking indemnification by the
Company for costs incurred to date as well as costs expected to be incurred in
connection with United taking remedial action. During July 1996, United
threatened to institute legal action in the event that the Company declined to
settle this matter.
During August 1996, the Company received a letter from the New York State
Department of Environmental Conservation ("DEC") which stated that in the
opinion of DEC the Company's refrigerants were the cause of the contamination
of United's wells. The DEC letter states that it is not aware of the extent of
the contamination or how the refrigerants entered the groundwater.
During December 1996, the Company and United Water entered into an interim
settlement agreement which provided for (a) reimbursement ($84,000) of
United's operating costs associated with certain wells through August 1996,
(b) reimbursement, subject to a dollar cap of $12,650 per month, of United
monthly operating costs for certain wells from September 1996 through April
1997, and (c) continued monitoring of refrigerant groundwater levels. Under
the agreement, United agreed not to commence legal action against the Company
prior to May 1, 1997. Neither party waived their rights as a result of the
interim agreement.
During August and September 1997, various proposals for possible further
remediation were discussed with the DEC and United in light of the reduction
of the levels of refrigerant in United's wells. Since August 1997 the levels
of refrigerant have been nearly non-detectable. The Company is currently
considering what, if any further remediation or action should be taken by the
Company. There can be no assurance that United will not commence legal action
seeking substantial damages and/or other relief; that any legal action or
settlement will be resolved in a manner favorable to the Company; or that the
ultimate outcome of any legal action or settlement will not have a material
adverse effect on the Company's financial condition and results of operations.
In June 1997, an action was commenced against the Company in the 19th Judicial
District Court, Parish of East Baton Rouge, State of Louisiana, by a former
salesperson and her spouse, who was terminated by the Company in June 1996,
alleging that the Company wrongfully terminated the employee, and is seeking
unspecified damages. The Company is defending the action and caused the action
to be removed to the Federal District Court. The Company believes the
allegations in the complaint to be without merit. There can be no assurance
that the Company will be successful in the defense of this action or that the
matter will ultimately be resolved in a manner favorable to the Company.
Item 6. Exhibits and Reports on Form 8-K
Exhibits
a) The following exhibits are attached to this report.
Exhibit 27: Financial Data Schedule (for SEC use only)
b) No report on Form 8-K was filed during the quarter ended September
30, 1997.
11
<PAGE>
Hudson Technologies, Inc. and subsidiaries
Form 10-QSB of September 30, 1997
SIGNATURES
Pursuant to the requirements of the Exchange Act, the registrant has
duly caused this Report to be signed on its behalf by the undersigned,
thereunto duly authorized.
HUDSON TECHNOLOGIES, INC.
By: /s/ Kevin J. Zugibe November 12, 1997
---------------------------------------
Kevin J. Zugibe Date
President/CEO
By: /s/ Brian F. Coleman November 12, 1997
---------------------------------------
Brian F. Coleman Date
Vice President and
Chief Financial Officer
12
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM FORM 10-QSB
AT SEPTEMBER 30, 1997 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS,
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> SEP-30-1997
<CASH> 668,000
<SECURITIES> 0
<RECEIVABLES> 4,769,000
<ALLOWANCES> 429,000
<INVENTORY> 4,299,000
<CURRENT-ASSETS> 9,744,000
<PP&E> 6,202,000
<DEPRECIATION> 0
<TOTAL-ASSETS> 25,411,000
<CURRENT-LIABILITIES> 5,554,000
<BONDS> 0
0
0
<COMMON> 51
<OTHER-SE> 18,496,000
<TOTAL-LIABILITY-AND-EQUITY> 25,411,000
<SALES> 20,459,000
<TOTAL-REVENUES> 20,459,000
<CGS> 17,768,000
<TOTAL-COSTS> 17,768,000
<OTHER-EXPENSES> 1,041,000
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 524,000
<INCOME-PRETAX> (4,004,000)
<INCOME-TAX> 0
<INCOME-CONTINUING> (4,004,000)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (4,004,000)
<EPS-PRIMARY> $(0.81)
<EPS-DILUTED> $(0.81)
</TABLE>
