<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 June 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 August 1, 1997
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<PAGE>
Hudson Technologies, Inc.
Index
Part I. Financial Information Page Number
- ------- --------------------- -----------
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
- ----------
1
<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: June 30, 1997 December 31, 1996
------------- -----------------
(unaudited)
<S> <C> <C>
Assets
Current assets:
Cash and cash equivalents $ 392 $ 422
Trade accounts receivable; net of allowance
for doubtful accounts of $645,000 and $545,000 3,749 2,476
Inventories 7,593 9,062
Income taxes receivable 920 930
Prepaid expenses and other current assets 284 141
------- -------
Total current assets 12,938 13,031
Property, plant and equipment, less accumulated depreciation 6,213 5,882
Goodwill and intangible assets, less accumulated amortization 7,526 7,754
Deferred income taxes 1,949 1,978
Other assets 95 130
------- -------
Total assets $28,721 $28,775
======= =======
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable and accrued expenses $4,202 $2,762
Short term debt; including loans from officers and
stockholders of $585,000 and $202,000 3,839 5,678
Reserve for restructuring 250 377
------- -------
Total current liabilities 8,291 8,817
Deferred income 63 71
Long-term debt, less current maturities 1,340 1,509
------- -------
Total liabilities 9,694 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 (3,534) (10)
------- -------
19,200 18,551
Less: Treasury stock, 21,000 shares at cost (173) (173)
------- -------
Total Stockholders' equity 19,027 18,378
------- -------
Total liabilities and Stockholders' equity $28,721 $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 Six month
period ended period ended
June 30, June 30,
--------------------- --------------------
1997 1996 1997 1996
---- ---- ---- ----
<S> <C> <C> <C> <C>
Revenues $ 5,477 $ 5,450 $13,499 $ 9,207
Cost of Sales 4,586 3,679 11,420 6,139
Inventory writedown to net realizable value 983 - 983 -
--------- --------- --------- ---------
Gross Profit (92) 1,771 1,096 3,068
Operating expenses:
Selling and marketing 479 251 898 483
General and administrative 1,768 981 2,757 1,711
Restructuring Reserve - 1,333 - 1,333
Depreciation and amortization 378 251 661 483
--------- --------- --------- ---------
Total operating expenses 2,625 2,816 4,316 4,010
--------- --------- --------- ---------
Loss from Operations (2,717) (1,045) (3,220) (942)
Other income (expense):
Interest income - 1 - 39
Interest expense (173) (31) (358) (83)
Other income 24 27 54 26
--------- --------- --------- ---------
(149) (3) (304) (18)
Loss before income taxes (2,866) (1,048) (3,524) (960)
Benefit for income taxes ( -) (350) ( -) (342)
--------- --------- --------- ---------
Net Loss $(2,866) $(698) $(3,524) $(618)
--------- --------- --------- ---------
______________________________________________
Net loss per common share $(0.57) $(0.15) $(0.72) $(0.13)
--------- --------- --------- ---------
Weighted average number of shares outstanding 5,031,784 4,564,527 4,871,407 4,597,433
--------- --------- --------- ---------
Net loss per common share-assuming dilution $(0.57) $(0.15) $(0.72) $(0.13)
--------- --------- --------- ---------
Weighted average number of shares outstanding-
assuming dilution 5,031,784 4,564,527 4,871,407 4,597,433
--------- --------- --------- ---------
</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 six month period ended June 30,
---------------------------------------
1997 1996
---- ----
<S> <C> <C>
Cash flows from operating activities:
Net loss $(3,524) $(618)
Adjustments to reconcile net loss
to cash used by operating activities:
Depreciation and amortization 661 483
Deferred income taxes 29 (228)
Allowance for doubtful accounts 100 -
Decrease (increase) in trade receivables (1,373) (2,948)
Decrease (increase) in inventories 1,469 (543)
Decrease (increase) in income taxes receivable 10 (182)
Decrease (increase) in prepaid and other current assets (143) (27)
Decrease (increase) in other assets 35 (5)
Increase (decrease) in accounts payable and accrued expenses 1,440 584
Increase (decrease) in deferred income (8) -
Increase (decrease) in reserve for restructuring (127) 1,333
-------- -------
Cash used by operating activities (1,431) (2,151)
-------- -------
Cash flows from investing activities:
Proceeds from sale of marketable securities - 1,100
Additions to property, plant, and equipment (765) (1,245)
Acquisitions accounted for as purchases - (715)
-------- -------
Cash used by investing activities (765) (860)
-------- -------
Cash flows from financing activities:
Proceeds from redemption of warrants - 265
Proceeds from issuance of stock 4,173 -
Proceeds from short-term bank borrowings - 432
Proceeds from convertible debt issue - 3,500
Repayment of debt (2,007) (380)
Purchase of treasury stock - (145)
-------- -------
Cash provided by financing activities 2,166 3,672
------- --------
Increase (decrease) in cash and cash equivalents (30) 661
Cash and equivalents at beginning of period 422 2,460
-------- -------
Cash and equivalents at end of period $392 $3,121
======== ========
</TABLE>
_____________________________________________________________________________
Certain 1996 amounts have been reclassified to conform with 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"), is a leading provider of 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 June 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 June 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 or 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
participates 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 ("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 of the 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 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 current 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 June 30, 1997
Revenues totaled $5.5 million, as compared to $5.5 million reported during
the comparable 1996 period. The 1997 sales included similar volumes of
refrigerant product sales as compared to the prior period.
Cost of sales totaled $5.6 million, an increase of $1.9 million or 51%
from the $3.7 million reported during the comparable prior year period due
mainly to higher refrigerant product cost and a reduction of inventory values by
$1.0 million to net realizable value. As a percentage of sales, cost of sales
were 102% of revenues for the three-month period ended June 30, 1997, an
increase from the 68% 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 and the reduction of
inventory values by $1.0 million to net realizable value.
Operating expenses totaled $2.6 million, a decrease of $0.2 million or 7%
from the $2.8 million reported during the comparable 1996 period. The decrease
was attributable to the non-recurring restructuring reserve offset by costs
associated with the Company's acquisitions (namely ESS), and an increase in the
number of employees.
Net loss totaled $2.9 million, an increase of $2.2 million or 314% from
the $0.7 million net loss reported during the comparable prior year period. The
increase was attributable mainly to lower gross profits on refrigerant sales and
the reduction of inventory values to net realizable value.
Six months ended June 30, 1997
Revenues totaled $13.5 million, an increase of $4.3 million or 47% from
the $9.2 million reported during the comparable 1996 period. The increase was
attributable primarily to the increase in refrigerant product sales.
Cost of sales totaled $12.4 million, an increase of $6.3 million or 103%
from the $6.1 million reported during the comparable prior year period. As a
percentage of sales, cost of sales were 92% of revenues for the six-month period
ended June 30, 1997, an increase from the 67% 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 by $1.0 million to net realizable
value.
Operating expenses totaled $4.3 million, an increase of $0.3 million or 8%
from the $4.0 million reported during the comparable 1996 period. The increase
was attributable to the Company's acquisition (namely ESS) and the increase in
the number of employees, offset by the lack of a restructuring reserve in 1997.
Net loss totaled $3.5 million, an increase of $2.9 million or 483% from
the $0.6 million 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 used in operating activities totaled $1.5 million for the six months
ended June 30, 1997 compared with a net cash usage of $2.2 million for the prior
year comparable period. The decrease of $0.7 million in cash usage was
attributable mainly to the reduction of inventories and accounts receivables
offset by an increase in net loss.
Net cash used in investing activities of $0.8 million for the six months ended
June 30, 1997, compared with net cash usage of $0.9 million for the comparable
period consisted primarily of equipment additions.
Cash flows from financing activities totaled $2.2 million for the six months
ended June 30, 1997 and consisted mainly of issuance of common shares to E.I.
DuPont de Nemours ($3.5 million) offset by retirement of debt ($3.1 million)
associated with the Company's Convertible Notes issued during 1996. Cash flows
from financing activities totaled $3.7 million for the six-month period ended
June 30, 1996 and consisted mainly of proceeds ($3.5 million) from the issuance
of convertible debt.
At June 30, 1997, the Company reported cash and equivalents totaling $0.4
million, a decrease of $2.7 million from the comparable prior year period.
Decrease in cash and equivalents were attributable mainly to fixed asset
purchases, and cash used to fund net loss.
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 $0.4 million at June 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 ($0.7 million at June
30, 1997) bears a fixed annual interest rate of 9.25% and is repayable over 20
years commencing February 1997.
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
($2.8 million at June 30, 1997) were limited to 85% of eligible trade accounts
receivable and 50% of inventories not exceeding trade receivable lending limits
(above) or $1.5 million. Substantially all the Company's assets are pledged as
collateral for Hudson obligations to MTB Bank. The Company was in compliance
with all terms of the MTB Bank agreement at June 30, 1997. The agreement expires
November 15, 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 about $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.
At June 30, 1997, the Company had working capital of approximately $4.6 million.
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
November 15, 1997. 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 refrigeration, 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, 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 which might not be easily reversed. 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.
10
<PAGE>
PART II. OTHER INFORMATION
Hudson Technologies, Inc. and subsidiaries
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 report states that it is not aware of the extent of the
contamination or how the Company's refrigerants entered the groundwater. The
Company is cooperating with the DEC to develop a proposal to quantify and
remediate the contamination.
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.
The Company met with representatives of the DEC and United in August
1997 to discuss proposals for possible further remediation in light of the
reduction to non-detectible levels of refrigerant in United's wells, based upon
the most recent test data provided by United. The Company is currently reviewing
the most current data and proposals provided by United to determine what if any
further 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
June 30, 1997.
11
<PAGE>
Hudson Technologies, Inc. and subsidiaries
Form 10-QSB of June 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 August 14, 1997
-------------------------------------
Kevin J. Zugibe Date
President/CEO
By: /s/ Brian F. Coleman August 14, 1997
-------------------------------------
Brian F. Coleman Date
Vice President and
Chief Financial Officer
By: /s/ Stephen J. Cole-Hatchard August 14, 1997
-----------------------------------------------
Stephen J. Cole-Hatchard Date
Vice President and Treasurer
12
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM FORM 10-QSB
AT JUNE 30, 1997 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> JUN-30-1997
<CASH> 392,000
<SECURITIES> 0
<RECEIVABLES> 4,394,000
<ALLOWANCES> 645,000
<INVENTORY> 7,593,000
<CURRENT-ASSETS> 12,938,000
<PP&E> 6,213,000
<DEPRECIATION> 0
<TOTAL-ASSETS> 28,721,000
<CURRENT-LIABILITIES> 8,291,000
<BONDS> 0
0
0
<COMMON> 51
<OTHER-SE> 18,976,000
<TOTAL-LIABILITY-AND-EQUITY> 28,721,000
<SALES> 13,499,000
<TOTAL-REVENUES> 13,499,000
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<INCOME-TAX> 0
<INCOME-CONTINUING> (3,524,000)
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<CHANGES> 0
<NET-INCOME> (3,524,000)
<EPS-PRIMARY> (0.72)
<EPS-DILUTED> (0.72)
</TABLE>
