Hudson Tech Q2 2025: EPS up 15%, Cash $84M, Sales Dip 3%

Q: How did Hudson Technologies鈥� Q2 2025 revenue compare to last year?

Q2 2025 revenue was $72.9 million, down 3.2% from $75.3 million in Q2 2024.

Q: What were HDSN鈥檚 Q2 2025 earnings per share?

Diluted EPS increased to $0.23 , up from $0.20 in the prior-year quarter.

Q: How much cash does Hudson Technologies have?

Cash and cash equivalents totaled $84.3 million at June 30, 2025.

Q: Did the company repurchase shares in 2025?

Yes, Hudson repurchased 803,653 shares for $4.5 million during the first six months of 2025.

Q: What is the status of the USA Refrigerants acquisition?

The $20.7 million cash deal closed on June 6, 2024 ; up to $2 million additional earn-out may be paid in 18 months.

[10-Q] Hudson Technologies Inc Quarterly Earnings Report

Filing Impact

(Neutral)

Filing Sentiment

(Neutral)

Form Type

10-Q

Rhea-AI Filing Summary

Hudson Technologies (HDSN) posted mixed Q2 2025 results. Revenue slipped 3.2% to $72.9 million, but gross margin widened to 31.3% (29.9% prior-year) as cost of sales fell faster than sales. Operating income was essentially flat at $12.7 million, while net income increased 6% to $10.2 million, lifting diluted EPS to $0.23 from $0.20. For the six-month period, revenue declined 8.8% to $128.2 million and net income fell 32% to $12.9 million, reflecting a weaker Q1 comparison.

Cash generation and balance sheet remain solid. Operating cash flow was $20.6 million year-to-date (vs. $40.8 million), but cash and equivalents climbed to $84.3 million, aided by an $18 million inventory draw-down. Inventories dropped 19% to $77.7 million, while total debt remains de-minimis and total liabilities are modest at $63.1 million against $317.9 million in assets. Shareholders鈥� equity rose to $254.8 million despite $4.5 million of share repurchases (804k shares) in 1H 2025.

The company continues to benefit from tightening EPA HFC regulations that favor reclamation, and it is integrating the June 2024 USA Refrigerants acquisition (cash purchase $20.7 million plus up to $2 million earn-out). Customer concentration persists: the U.S. Defense Logistics Agency exceeded 10% of revenue and receivables in both periods.

項堧摐鞀� 韰岉伂雴€搿滌鞀�(HDSN)電� 2025雲� 2攵勱赴鞁れ爜鞐愳劀順检灛霅� 瓴瓣臣毳� 氚滍憸頄堨姷雼堧嫟. 毵れ稖鞚€ 3.2% 臧愳唽頃� 7,290毵� 雼煬毳� 旮半頄堨溂雮�, 毵れ稖鞗愱皜臧€ 毵れ稖氤措嫟雿� 牍犽ゴ瓴� 臧愳唽頃橂┐靹� 齑濎澊鞚惦鞚€ 31.3%(鞝勲厔 29.9%)搿� 頇曤寑霅橃棃鞀惦媹雼�. 鞓侅梾鞚挫澋鞚€ 1,270毵� 雼煬搿� 瓯办潣氤€頃澊鞐嗢棃鞙茧┌, 靾滌澊鞚奠潃 6% 歃濌皜頃� 1,020毵� 雼煬搿� 頋劃欤茧嫻靾滌澊鞚奠潃 0.20雼煬鞐愳劀 0.23雼煬搿� 靸侅姽頄堨姷雼堧嫟. 6臧滌洈雸勳爜旮瓣皠霃欖晥毵れ稖鞚€ 8.8% 臧愳唽頃� 1鞏� 2,820毵� 雼煬, 靾滌澊鞚奠潃 32% 臧愳唽頃� 1,290毵� 雼煬搿� 1攵勱赴牍勱祼臧€ 鞎巾檾霅� 鞓來枼鞚� 氚橃榿頄堨姷雼堧嫟.

順勱笀彀届稖瓿� 鞛靸來儨電� 瓴碃頃╇媹雼�. 鞐办磮攵€韯� 鞖挫榿順勱笀頋愲鞚€ 2,060毵� 雼煬(鞝勲厔 4,080毵� 雼煬雽€牍�)鞓€鞙茧倶, 順勱笀氚� 順勱笀靹� 鞛愳偘鞚€ 8,430毵� 雼煬搿� 歃濌皜頄堨溂氅�, 鞚措姅 1,800毵� 雼煬鞚� 鞛碃臧愳唽鞐� 頌橃瀰鞚€ 氚� 韥诫媹雼�. 鞛碃電� 19% 臧愳唽頃� 7,770毵� 雼煬鞚措┌, 齑� 攵€毂勲姅氙鸽頃� 靾橃鞚搓碃齑� 攵€毂勲姅 6,310毵� 雼煬搿� 鞛愳偘 3鞏� 1,790毵� 雼煬鞐� 牍勴暣鞝侅潃韼胳瀰雼堧嫟. 欤检＜鞛愲掣鞚€ 2025雲� 靸侂皹旮� 450毵� 雼煬(80毵� 4觳� 欤�) 鞛愳偓欤� 毵れ瀰鞐愲弰攵堦惮頃橁碃 2鞏� 5,480毵� 雼煬搿� 歃濌皜頄堨姷雼堧嫟.

須岇偓電� EPA鞚� HFC 攴滌牅臧曧檾搿� 鞚疙暣鞛儩靷梾鞐� 鞙犽Μ頃� 頇橁步鞚� 瓿勳啀雸勲Μ瓿� 鞛堨溂氅�, 2024雲� 6鞗旍棎鞚胳垬頃� USA Refrigerants(順勱笀甑Г 2,070毵� 雼煬氚� 斓滊寑 200毵� 雼煬鞚� 於旉皜歆€旮� 臧€電�)毳� 韱淀暕欷戩瀰雼堧嫟. 瓿犼皾歆戩霃勲姅歆€靻嶋悩瓿� 鞛堨溂氅�, 氙戈淡甑癌氍检瀽觳澊霊� 旮瓣皠氇憪毵れ稖瓿� 毵れ稖毂勱秾鞐愳劀 10%毳� 齑堦臣頄堨姷雼堧嫟.

Positive

Net income grew 6% YoY in Q2 2025 to $10.2 million despite lower sales.
Gross margin expanded to 31.3% from 30.0%, showing pricing and cost discipline.
Cash balance rose to $84.3 million, up $14.2 million since year-end 2024.
Inventory reduced by $18.6 million, freeing working capital and lowering carrying risk.
Low leverage: total liabilities only 20% of assets, providing financial flexibility.
EPA HFC phase-down and finalized refrigerant management rule create long-term demand tailwinds for reclamation.

Negative

Q2 revenue declined 3.2% YoY; first-half sales down 8.8%.
Six-month net income fell 32% YoY, indicating tougher first quarter.
Operating cash flow halved to $20.6 million from $40.8 million year-ago.
Customer concentration risk: U.S. Defense Logistics Agency >10% of revenue and receivables.
Share repurchases ($4.5 million) reduced cash available for other uses.

Insights

TL;DR: Strong margins and cash, but revenue softness keeps outlook balanced.

Revenue contraction (-3% Q2, -9% YTD) tempers enthusiasm, yet management preserved profitability via cost controls, inventory write-downs and higher pricing. Net cash of $84 million plus minimal leverage offers flexibility for further buybacks or bolt-ons. EPA-driven HFC phase-down under AIM Act should support long-term refrigerant reclamation demand, a core competency. Near-term investor debate is whether volume weakness is cyclical or structural. Overall, results look neutral-to-slightly positive given margin resilience.

TL;DR: Regulatory tailwinds and acquisition synergy offset top-line dip.

Hudson鈥檚 niche鈥擧FC reclamation鈥攇ains value as 40% production cuts bite through 2029. The USA Refrigerants buy expands feedstock and distribution, likely unlocking additional reclaimed pounds for 2026 season. Gross margin uptick despite lower sales signals pricing power amid tighter supply. Inventory reduction indicates agile sourcing, but contracting volumes warrant monitoring. With only $64 million liabilities, company is well positioned for EPA-mandated leak detection and recycled-content rules. I view quarter as modestly positive for long-term thesis.

08/01/2025 - 04:00 PM

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Table of Contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2025

☐ 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 registrant as specified in its charter)

New York
(State or other jurisdiction of
incorporation or organization)

13-3641539
(I.R.S. Employer
Identification No.)


300 Tice Boulevard Suite 290 Woodcliff Lake, New Jersey (Address of principal executive offices)	07677 (Zip Code)

Registrant’s telephone number, including area code (845) 735-6000

Securities registered pursuant to Section 12(b) of the Act:


Title of Each Class	Trading Symbol(s)	Name of each exchange on which registered

Common stock, $0.01 par value	HDSN	NASDAQ Capital Market

Indicate by check mark whether the registrant: (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 12 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 past 90 days. ☒ Yes ☐ No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (Section 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files.) ☒ Yes ☐ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer”, “accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act:


Large accelerated filer	☐	Accelerated filer	☒
Non-accelerated filer	☐	Smaller reporting company	☐
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ☐ Yes ☒ 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		43,668,370 shares
Class		Outstanding at July 16, 2025

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Hudson Technologies, Inc.

Index

Part	Item		Page

Part I.	Financial Information		3

	Item 1	- Financial Statements (unaudited)	3
		- Consolidated Balance Sheets	3
		- Consolidated Statements of Income	4
		- Consolidated Statements of Stockholders’ Equity	5
		- Consolidated Statements of Cash Flows	6
		- Notes to the Consolidated Financial Statements	7
	Item 2	- Management’s Discussion and Analysis of Financial Condition and Results of Operations	22
	Item 3	- Quantitative and Qualitative Disclosures About Market Risk	27
	Item 4	- Controls and Procedures	27

Part II.	Other Information		28

	Item 1A	- Risk Factors	28
	Item 2	- Unregistered Sales of Equity Securities and Use of Proceeds	28
	Item 5	- Other Information	28
	Item 6	- Exhibits	29

	Signatures		30

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PART I – FINANCIAL INFORMATION

Item 1 - Financial Statements

Hudson Technologies, Inc. and Subsidiaries

Consolidated Balance Sheets

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


	June 30,		December 31,
	2025		2024
	(unaudited)
Assets
Current assets:
Cash and cash equivalents	$	84,293	$	70,134
Trade accounts receivable – net of allowance for credit losses of $853 and $1,079, respectively		35,883		13,629
Inventories		77,683		96,247
Income tax receivable		3,094		6,284
Prepaid expenses and other current assets		11,634		9,218
Total current assets		212,587		195,512

Property, plant and equipment, less accumulated depreciation		22,219		21,554
Goodwill		62,280		62,280
Intangible assets, less accumulated amortization		12,455		14,100
Right of use asset		5,960		6,878
Other assets		2,352		2,328
Total Assets	$	317,853	$	302,652

Liabilities and Stockholders’ Equity
Current liabilities:
Trade accounts payable	$	13,181	$	8,692
Accrued expenses and other current liabilities		37,940		33,813
Accrued payroll		2,083		3,704
Other short-term liabilities		1,600		1,600
Total current liabilities		54,804		47,809
Deferred tax liability		4,331		4,076
Long-term lease liabilities		3,939		4,917
Total Liabilities		63,074		56,802

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 100,000,000; issued and outstanding: 43,652,459 and 44,284,374, respectively		437		443
Additional paid-in capital		106,801		110,792
Retained earnings		147,541		134,615
Total Stockholders’ Equity		254,779		245,850

Total Liabilities and Stockholders’ Equity	$	317,853	$	302,652

See Accompanying Notes to the Consolidated Financial Statements.

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Hudson Technologies, Inc. and Subsidiaries

Consolidated Statements of Income

(unaudited)

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


	Three months				Six months
	ended June 30,				ended June 30,
	2025		2024		2025		2024
Revenues	$	72,849	$	75,282	$	128,192	$	140,532
Cost of sales		50,038		52,711		93,313		96,540
Gross profit		22,811		22,571		34,879		43,992

Operating expenses:
Selling, general and administrative		9,265		9,013		17,435		16,960
Amortization		822		760		1,645		1,458
Total operating expenses		10,087		9,773		19,080		18,418

Operating income		12,724		12,798		15,799		25,574

Interest (income) expense		(651)		152		(1,227)		366

Income before income taxes		13,375		12,646		17,026		25,208

Income tax expense		3,207		3,061		4,100		6,061

Net income	$	10,168	$	9,585	$	12,926	$	19,147

Net income per common share – Basic	$	0.23	$	0.21	$	0.29	$	0.42
Net income per common share – Diluted	$	0.23	$	0.20	$	0.28	$	0.40
Weighted average number of shares outstanding – Basic		43,631,187		45,513,445		43,843,302		45,511,434
Weighted average number of shares outstanding – Diluted		45,157,911		47,275,901		45,390,662		47,377,534

See Accompanying Notes to the Consolidated Financial Statements.

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Hudson Technologies, Inc. and Subsidiaries

Consolidated Statements of Stockholders’ Equity

(unaudited)

(Amounts in thousands, except for share amounts)

Three Months Ended June 30,


				Additional
	Common Stock			Paid-in		Retained
	Shares	Amount		Capital		Earnings		Total
Balance at April 1, 2024	45,510,925	$	455	$	118,367	$	119,789	$	238,611

Issuance of common stock upon exercise of stock options	5,221		—		—		—		—

Share - based compensation	—		—		472		—		472

Net income	—		—		—		9,585		9,585

Balance at June 30, 2024	45,516,146	$	455	$	118,839	$	129,374	$	248,668

Balance at April 1, 2025	43,975,786	$	440	$	109,009	$	137,373	$	246,822

Issuance of common stock upon exercise of stock options	171,738		2		(2)		—		—

Repurchase of common shares	(495,065)		(5)		(2,699)		—		(2,704)

Share - based compensation	—		—		493		—		493

Net income	—		—		—		10,168		10,168

Balance at June 30, 2025	43,652,459	$	437	$	106,801	$	147,541	$	254,779

Six Months Ended June 30,


				Additional
	Common Stock			Paid-in		Retained
	Shares	Amount		Capital		Earnings		Total
Balance at January 1, 2024	45,502,380	$	455	$	118,091	$	110,227	$	228,773

Issuance of common stock upon exercise of stock options	13,766		—		—		—		—

Excess tax benefits from exercise of stock options	—		—		(3)		—		(3)

Share - based compensation	—		—		751		—		751

Net income	—		—		—		19,147		19,147

Balance at June 30, 2024	45,516,146	$	455	$	118,839	$	129,374	$	248,668

Balance at January 1, 2025	44,284,374	$	443	$	110,792	$	134,615	$	245,850

Issuance of common stock upon exercise of stock options	171,738		2		(2)		—		—

Repurchase of common shares	(803,653)		(8)		(4,527)		—		(4,535)

Share - based compensation	—		—		538		—		538

Net income	—		—		—		12,926		12,926

Balance at June 30, 2025	43,652,459	$	437	$	106,801	$	147,541	$	254,779

See Accompanying Notes to the Consolidated Financial Statements

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Hudson Technologies, Inc. and Subsidiaries

Consolidated Statements of Cash Flows

(unaudited)

(Amounts in thousands)


	Six months
	ended June 30,
	2025		2024
Cash flows from operating activities:
Net income	$	12,926	$	19,147
Adjustments to reconcile net income to cash provided by operating activities:
Depreciation		1,502		1,564
Amortization of intangible assets		1,645		1,458
Impairment of long lived assets		—		441
Lower of cost or net realizable value inventory adjustment		512		1,983
Allowance for credit losses		(120)		44
Share based compensation		538		751
Amortization of deferred finance costs		113		114
Deferred tax expense (benefit)		255		(380)
Changes in assets and liabilities:
Trade accounts receivable		(22,134)		(2,565)
Inventories		18,052		33,811
Prepaid and other assets		(2,553)		(2,776)
Lease obligations		(1)		(2)
Income taxes receivable		3,190		2,887
Accounts payable and accrued expenses		6,644		(15,642)
Cash provided by operating activities		20,569		40,835

Cash flows from investing activities:
Payments for acquisition		—		(20,670)
Additions to property, plant, and equipment		(1,875)		(2,085)
Cash used in investing activities		(1,875)		(22,755)

Cash flows from financing activities:
Proceeds from issuance of common stock		—		1
Excess tax benefits from exercise of stock options		—		(3)
Repurchase of common shares		(4,535)		—
Cash used in financing activities		(4,535)		(2)

Increase in cash and cash equivalents		14,159		18,078
Cash and cash equivalents at beginning of period		70,134		12,446
Cash and cash equivalents at end of period	$	84,293	$	30,524

Supplemental disclosure of cash flow information:
Cash paid for interest	$	256	$	311
Cash paid for income taxes – net	$	655	$	3,554

Property and equipment included in accrued expenses and other current liabilities	$	905	$	—

See Accompanying Notes to the Consolidated Financial Statements

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Hudson Technologies, Inc. and Subsidiaries

Notes to the Consolidated Financial Statements

Note 1 - Summary of Significant Accounting Policies

Business

Hudson Technologies, Inc. (“Hudson” or the “Company”), incorporated under the laws of New York on January 11, 1991, is a refrigerant services company providing innovative solutions to recurring problems within the refrigeration industry. Hudson provides environmentally sustainable solutions from initial sale of refrigerant gas through recovery, reclamation and reuse, peak operating performance of equipment through energy efficiency and emergency air conditioning and refrigeration system repair, to final refrigerant disposal and carbon credit trading.

The Company’s operations consist of one reportable segment. The Company’s products and services are primarily used in commercial air conditioning, industrial processing and refrigeration systems, and include refrigerant and industrial gas sales, refrigerant management services consisting primarily of reclamation of refrigerants and RefrigerantSide® Services performed at a customer’s site. RefrigerantSide® Services consist of system decontamination to remove moisture, oils and other contaminants intended to restore systems to designed capacity. As a component of the Company’s products and services, the Company also participates in the generation of carbon offset projects. The Company operates principally through its wholly-owned subsidiary, Hudson Technologies Company. Unless the context requires otherwise, references to the “Company”, “Hudson”, “we”, “us”, “our”, or similar pronouns refer to Hudson Technologies, Inc. and its subsidiaries.

In preparing the accompanying consolidated financial statements, and in accordance with Accounting Standards Codification (“ASC”) 855-10 “Subsequent Events”, the Company’s management has evaluated subsequent events through the date that the financial statements were filed.

The accompanying unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial statements and with the instructions of Regulation S-X. 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 this quarterly report should be read in conjunction with the Company’s audited financial statements and related notes thereto for the year ended December 31, 2024. Operating results for the six-month period ended June 30, 2025 are not necessarily indicative of the results that may be expected for the year ending December 31, 2025.

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.

Recent Acquisition

On June 6, 2024, the Company’s subsidiary Hudson Technologies Company completed the acquisition of substantially all the business assets of USA United Suppliers of America, Inc. (d/b/a USA Refrigerants) (“USA Refrigerants”) and B&B Jobber Services, Inc. (collectively, the “USA Refrigerants Acquisition”). The consideration for the USA Refrigerants Acquisition was approximately $20.7 million in cash, paid at the closing, and provides for a further contingent payment of up to $2.0 million payable, to the extent earned, approximately 18 months from the closing date.

USA Refrigerants is a leading refrigerant distributor and distributes, reclaims and packages refrigerant gases for a variety of end uses. Potential benefits of the USA Refrigerants Acquisition include (i) providing a broader customer network which will provide the Company with increased access to refrigerant for reclamation and strengthen the Company’s refrigerant distribution capabilities; (ii) adding incremental access to recovered pounds of refrigerants for sale in future periods to support the growth in reclamation; and (iii) enhancing the Company’s geographic footprint in the United States.

AIM Act

The United States Environmental Protection Agency (“EPA”) issued several final rules establishing the framework to allocate allowances for production and consumption of newly manufactured hydrofluorocarbon refrigerants (“HFCs”) and has provided allowances through 2029. The EPA is responsible for the administration of the HFC phase down enacted by Congress under the American Innovation and Manufacturing Act (the “AIM Act”). There are no restrictions placed on the reclamation of HFC refrigerants.

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The AIM Act directs the EPA to address the reduction in virgin HFCs and provides authority to do so in three respects:

phase down the production and consumption of listed HFCs,

facilitate the transition to next-generation technologies, and

manage these HFCs and their substitutes including reclamation of refrigerants.

Congress required that the EPA consider ways to promote reclamation in all phases of its implementation of the AIM Act. The AIM Act introduced a stepdown of 10% from baseline levels in 2022 and 2023, and establishes a cumulative 40% reduction in the baseline for 2024 through 2029. Hudson received allocation allowances for calendar years 2023 and 2024 equal to approximately 1% of the total HFC consumption allowances, with allowances for future periods to be determined at a later date. In addition, the EPA has finalized its technology transition rule, requiring the manufacturing and installation of lower global warming potential (“GWP”) systems commencing in 2025 and beyond.

Reclamation is critical to maintaining necessary HFC supply levels for the installed base of operating systems to ensure an orderly phasedown so that systems owners are able to recognize the full economic value of their systems through end of life. Reclamation is not subject to the allowance system or restricted from use.

On September 20, 2024, the EPA announced the latest actions to phase down HFCs under the AIM Act:

Final Refrigerant Management Rule – The rule requires better management and reuse of existing HFCs, including by reducing wasteful leaks from equipment and supporting HFC recycling and reclamation. The rule includes requirements for repairing leaky equipment, use of automatic leak detection systems on large refrigeration systems, mandating the use of reclaimed HFCs for certain applications, recovery of HFCs from cylinders before their disposal, and a container tracking system.

Consolidation

The consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States, 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 Holdings, Inc. and Hudson Technologies Company. The Company does not present a statement of comprehensive income as its comprehensive income is the same as its net income.

Fair Value of Financial Instruments

The carrying values of financial instruments including cash, trade accounts receivable and accounts payable approximate fair value at June 30, 2025 and December 31, 2024, because of the relatively short maturity of these instruments. See Note 2 for further details.

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 and, at times, the balances exceed FDIC insurance coverage. The Company’s trade accounts receivable are primarily due from companies throughout the United States. The Company reviews each customer’s credit history before extending credit.

The Company establishes an allowance for credit losses. In accordance with the “expected credit loss” model, the carrying amount of accounts receivable is reduced by a valuation allowance that reflects the Company’s best estimate of the amounts that it does not expect to collect. In addition to reviewing delinquent accounts receivable, the Company considers many factors in estimating its reserve, including types of customers and their credit worthiness, experience and historical data adjusted for current conditions.

The carrying value of the Company’s accounts receivable is reduced by the established allowance for credit losses. The allowance for credit losses includes any accounts receivable balances that are determined to be uncollectible, along with a general reserve for the remaining accounts receivable balances. The Company adjusts its reserves based on factors that affect the collectability of the accounts receivable balances.

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For the six-month periods ended June 30, 2025 and 2024, the United States Defense Logistics Agency (the “DLA”) accounted for greater than 10% of the Company’s revenue and over 10% of the outstanding accounts receivable at June 30, 2025 and June 30, 2024. Revenue from the DLA totaled $17.7 million and $18.8 million for the six-month periods ended June 30, 2025 and June 30, 2024. Accounts receivable from the DLA totaled $3.6 million and $3.5 million as of June 30, 2025 and December 31, 2024, respectively.

The loss of a principal customer or a decline in the economic prospects of and/or a reduction in purchases of the Company’s products or services by any such customer could have a material adverse effect on the Company’s operating results and financial position.

Cash and Cash Equivalents

Temporary investments with original maturities of ninety days or less are included in cash and cash equivalents.

Inventories

Inventories, consisting primarily of refrigerant products available for sale, are stated at the lower of cost, on a first-in first-out basis, or net realizable value. Where the market price of inventory is less than the related cost, the Company may be required to write down its inventory through a lower of cost or net realizable value adjustment, the impact of which would be reflected in cost of sales on the Consolidated Statements of Income. Any such adjustment would be based on management’s judgment regarding future demand and market conditions and analysis of historical experience.

Property, Plant and Equipment

Property, plant and equipment are stated at cost, including internally manufactured equipment. The cost to complete equipment that is under construction is not considered to be material to the Company’s financial position. Provision for depreciation is recorded 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. Costs of maintenance and repairs are charged to expense when incurred.

Due to the specialized nature of the Company’s business, it is possible that the Company’s estimates of equipment useful life periods may change in the future.

Goodwill

The Company has made acquisitions that included a significant amount of goodwill and other intangible assets. The Company applies the purchase method of accounting for acquisitions, which among other things, requires the recognition of goodwill (which represents the excess of the purchase price of the acquisition over the fair value of the net assets acquired and identified intangible assets). The Company tests its goodwill for impairment annually on a qualitative or quantitative basis (on the first day of the fourth quarter) and between annual tests if an event occurs or circumstances change that would more likely than not reduce the fair value of an asset below its carrying value. Goodwill is tested for impairment at the reporting unit level. When performing the annual impairment test, the Company has the option of first performing a qualitative assessment, which requires management to make assumptions affecting a reporting unit, to determine the existence of events and circumstances that would lead to a determination that it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If such a conclusion is reached, the Company is then required to perform a quantitative impairment assessment of goodwill. The Company has one reporting unit at June 30, 2025. Other intangible assets that meet certain criteria are amortized over their estimated useful lives.

An impairment charge is recorded based on the excess of a reporting unit’s carrying amount over its fair value. An impairment charge would be recognized when the carrying amount exceeds the estimated fair value of a reporting unit. These impairment evaluations use many assumptions and estimates in determining an impairment loss, including certain assumptions and estimates related to future earnings. If the Company does not achieve its earnings objectives, the assumptions and estimates underlying these impairment evaluations could be adversely affected, which could result in an asset impairment charge that would negatively impact operating results. During the fourth quarter of 2024, the Company completed its annual impairment test as of October 1 and determined in its qualitative assessment it is more likely than not that the fair value of the reporting unit is greater than its carrying amount, resulting in no goodwill impairment. There can be no assurances that future sustained declines in macroeconomic or business conditions affecting the Company’s industry will not occur, which could result in goodwill impairment charges in future periods.

There were no goodwill impairment losses recognized in 2024 or the six months ended June 30, 2025.

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Leases

The Company determines if an arrangement contains a lease at inception. An arrangement contains a lease if it implicitly or explicitly identifies an asset to use and conveys the right to control the use of the identified asset in exchange for consideration. As a lessee, the Company includes operating leases in right-of-use (“ROU”) assets, and long-term lease liabilities in its consolidated balance sheets.

Finance leases are included in property, plant and equipment in the consolidated balance sheets.

ROU assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized upon commencement of the lease based on the present value of the lease payments over the lease term. As most of the Company’s leases do not provide an implicit interest rate, the Company generally uses its incremental borrowing rate based on the estimated rate of interest for fully collateralized and fully amortizing borrowings over a similar term of the lease payments and commencement date to determine the present value of lease payments. When readily determinable, the Company uses the implicit rate. The Company’s lease terms include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. Lease expense for lease payments is recognized on a straight-line basis over the lease term. Expenses associated with operating leases and finance leases are included in selling, general and administrative expense within the consolidated statements of income.

Cylinder Deposit Liability

The cylinder deposit liability, which is included in accrued expenses and other current liabilities on the Company’s Balance Sheets, represents the amount due to customers for the return of refillable cylinders. The Company charges its customers cylinder deposits upon the shipment of refrigerant gases that are contained in refillable cylinders. The amount charged to the customer by the Company approximates the cost of a new cylinder of the same size. Upon return of a cylinder, this liability is reduced. The cylinder deposit liability balance was $22.0 million and $19.4 million at June 30, 2025 and December 31, 2024, respectively.

Revenues and Cost of Sales

The Company’s products and services are primarily used in commercial air conditioning, industrial processing and refrigeration systems. Most of the Company’s revenues are realized from the sale of refrigerant and industrial gases and related products. The Company also generates revenue from refrigerant management services performed at a customer’s site and in-house. The Company conducts its business primarily within the US.

The Company applies the FASB’s guidance on revenue recognition, which requires the Company to recognize revenue in an amount that reflects the consideration to which the Company expects to be entitled in exchange for goods or services transferred to its customers. In most instances, the Company’s contract with a customer is the customer’s purchase order and the sales price to the customer is fixed. For certain customers, the Company may also enter into a sales agreement outlining a framework of terms and conditions applicable to future purchase orders received from that customer. Because the Company’s contracts with customers are typically for a single customer purchase order, the duration of the contract is usually less than one year. The Company’s performance obligations related to product sales are satisfied at a point in time, which may occur upon shipment of the product or receipt by the customer, depending on the terms of the arrangement. The Company’s performance obligations related to reclamation and RefrigerantSide® services are generally satisfied at a point in time when the service is performed. Accordingly, revenues are recorded upon the shipment of the product, or in certain instances upon receipt by the customer, or the completion of the service.

In July 2016 the Company was awarded, as prime contractor, a five-year contract, including a five-year renewal option, which has been exercised through July 2026, by the United States Defense Logistics Agency (“DLA”) for the management, supply, and sale of refrigerants, compressed gases, cylinders, and related services. Due to the contract containing multiple performance obligations, the Company assessed the arrangement in accordance with ASC 606-10-25-14. The Company determined that the sale of refrigerants and the management services provided under the contract each have stand-alone value. Accordingly, the performance obligation related to the sale of refrigerants is satisfied at a point in time, mainly when the customer receives and obtains control of the product. The performance obligation related to management service revenue is satisfied over time and revenue is recognized on a straight-line basis over the term of the arrangement as the management services are provided. For both six-month periods ended June 30, 2025 and 2024 management services revenue was $1.2 million respectively, which is included within product and related sales revenue in the table below.

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Cost of sales is recorded based on the cost of products shipped or services performed and related direct operating costs of the Company’s facilities. In general, the Company performs shipping and handling services for its customers in connection with the delivery of refrigerant and other products. The Company elected to implement ASC 606-10-25-18B, whereby the Company accounts for such shipping and handling as activities to fulfill the promise to transfer the good. To the extent that the Company charges its customers shipping fees, such amounts are included as a component of revenue and the corresponding costs are included as a component of cost of sales.

The Company’s revenues are derived from Product and related sales and RefrigerantSide (R) Services revenues. The revenues for each of these lines are as follows:


	Three Months				Six Months
	ended June 30,				ended June 30,
	2025		2024		2025		2024
(in thousands)
Product and related sales	$	70,512	$	72,987	$	124,377	$	136,798
RefrigerantSide ^® Services	$	2,337	$	2,295	$	3,815	$	3,734
Total	$	72,849	$	75,282	$	128,192	$	140,532

Income Taxes

The Company is taxed at statutory corporate income tax rates after adjusting income reported for financial statement purposes for certain items. Current income tax expense reflects the tax results of revenues and expenses currently taxable or deductible. The Company utilizes the asset and liability method of accounting for deferred income taxes, which provides for the recognition of deferred tax assets or liabilities, based on enacted tax rates and laws, for the differences between the financial and income tax reporting bases of assets and liabilities. The tax benefit associated with the Company’s net operating loss carry forwards (“NOLs”) is recognized to the extent that the Company expects to realize future taxable income.

As of June 30, 2025, the Company had no federal NOLs, as the Company utilized all of its remaining federal NOLs during the year ended December 31, 2022. As of June 30, 2025, the Company had state tax NOLs of approximately $0.8 million, expiring in various years. The Company reviews the likelihood that it will realize the benefit of its deferred tax assets on a quarterly basis.

On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was signed into law in the U.S. As the legislation was signed into law after the close of the Company’s second quarter, its impacts are not reflected in the Company’s results for the six months ended June 30, 2025. The Company is in the process of evaluating the OBBBA and has not estimated its financial impact at this time.

The Company evaluates uncertain tax positions, if any, by determining if it is more likely than not to be sustained upon examination by the taxing authorities. As of June 30, 2025 and December 31, 2024, the Company believes it had no uncertain tax positions.

Income per Common and Equivalent Shares

If dilutive, common equivalent shares (common shares assuming exercise of options) utilizing the treasury stock method are considered in the presentation of diluted income per share. The reconciliation of shares used to determine net income per share is as follows (dollars in thousands, unaudited):


	Three Months				Six Months
	ended June 30,				ended June 30,
	2025		2024		2025		2024
Net income	$	10,168	$	9,585	$	12,926	$	19,147

Weighted average number of shares – basic		43,631,187		45,513,445		43,843,302		45,511,434
Shares underlying options		1,526,724		1,762,456		1,547,360		1,866,100
Weighted average number of shares – diluted		45,157,911		47,275,901		45,390,662		47,377,534

During the three-month periods ended June 30, 2025 and 2024, certain options aggregating 767,172 and 505,585 shares, respectively, have been excluded from the calculation of diluted shares, due to the fact that their effect would be anti-dilutive.

During the six-month periods ended June 30, 2025 and 2024, certain options aggregating 767,172 and 59,963 shares, respectively, have been excluded from the calculation of diluted shares, due to the fact that their effect would be anti-dilutive.

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Estimates and Risks

The preparation of financial statements in conformity with generally accepted accounting principles in the United States requires the use of estimates and assumptions that affect the amounts reported in these financial statements and footnotes. The Company considers these accounting estimates to be critical in the preparation of the accompanying consolidated financial statements. The Company uses information available at the time the estimates are made. However, these estimates could change materially if different information or assumptions were used. Additionally, these estimates may not ultimately reflect the actual amounts of the final transactions that occur. The Company utilizes both internal and external sources to evaluate potential current and future liabilities for various commitments and contingencies. In the event that the assumptions or conditions change in the future, the estimates could differ from the original estimates.

Several of the Company’s accounting policies involve significant judgments, uncertainties, and estimates. The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities. Actual results may differ from these estimates under different assumptions or conditions. To the extent that actual results differ from management’s judgments and estimates, there could be a material adverse effect on the Company. On a continuous basis, the Company evaluates its estimates, including, but not limited to, those estimates related to its allowance for credit losses, inventory reserves, goodwill and commitments and contingencies. With respect to trade accounts receivable, the Company estimates the necessary allowance for credit losses based on both historical and anticipated trends of payment history and the ability of the customer to fulfill its obligations. For inventory, the Company evaluates both current and anticipated sales prices of its products to determine if a write down of inventory to net realizable value is necessary.

The Company participates in an industry that is highly regulated, and changes in the regulations affecting its business could affect its operating results. Currently the Company purchases virgin hydrofluorocarbon (“HFC”) and hydrofluroolefin (“HFO”) refrigerants and reclaimable, primarily hydrochlorofluorocarbons (“HCFC”), HFC and chlorofluorocarbon (“CFC”), refrigerants from suppliers and its customers. To the extent that the Company is unable to source sufficient quantities of refrigerants or is unable to obtain refrigerants on commercially reasonable terms or experiences a decline in demand and/or price for refrigerants sold by the Company, the Company could realize reductions in revenue from refrigerant sales, which could have a material adverse effect on its operating results and its financial position.

The Company is subject to various legal proceedings. The Company assesses the merit and potential liability associated with each of these proceedings. In addition, the Company estimates potential liability, if any, related to these matters. To the extent that these estimates are not accurate, or circumstances change in the future, the Company could realize liabilities, which could have a material adverse effect on its operating results and its financial position.

Impairment of Long-lived Assets

The Company reviews long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of the assets to the future net cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. Assets to be disposed of are reported at the lower of the carrying amount or fair value less the cost to sell.

Capitalized Software Development Costs

Capitalized internal-use software costs consist of costs to purchase and develop software. For software to be used solely to meet internal needs and for cloud-based applications used to deliver services, the Company capitalizes costs incurred during the application development stage and includes such costs within property, plant and equipment, net within the consolidated balance sheets.

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Recent Accounting Pronouncements

In December 2023, the Financial Accounting Standards Board (“FASB”) issued ASU 2023 - 09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures,” which requires public business entities to disclose additional information in specified categories with respect to the reconciliation of the effective tax rate to the statutory rate for federal, state, and foreign income taxes. It also requires greater detail about individual reconciling items in the rate reconciliation to the extent the impact of those items exceeds a specified threshold. In addition to new disclosures associated with the rate reconciliation, the ASU requires information pertaining to taxes paid (net of refunds received) to be disaggregated for federal, state, and foreign taxes and further disaggregated for specific jurisdictions to the extent the related amounts exceed a quantitative threshold. The ASU also describes items that need to be disaggregated based on their nature, which is determined by reference to the item’s fundamental or essential characteristics, such as the transaction or event that triggered the establishment of the reconciling item and the activity with which the reconciling item is associated. The ASU eliminates the historic requirement that entities disclose information concerning unrecognized tax benefits having a reasonable possibility of significantly increasing or decreasing in the 12 months following the reporting date. This ASU is effective for annual periods beginning after December 15, 2024. Early adoption is permitted for annual financial statements that have not yet been issued or made available for issuance. This ASU should be applied on a prospective basis; however, retrospective application is permitted. The Company is currently evaluating the impact that ASU 2023 - 09 will have on its consolidated financial statements.

In November 2024, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2024-03, “Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosure (Subtopic 220-40): Disaggregation of Income Statement Expenses,” which requires additional disclosure about the specific expense categories in the notes to financial statements at interim and annual reporting periods. The amendments in this ASU do not change or remove current expense disclosure requirements but affect where this information appears in the notes to financial statements. This ASU is effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027, with early adoption permitted. Upon adoption, the guidance can be applied prospectively or retrospectively. The Company is currently evaluating the impact that ASU 2024-03 will have on its consolidated financial statements.

Note 2 - Fair Value

ASC Subtopic 820-10 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The Company often utilizes certain assumptions that market participants would use in pricing the asset or liability, including assumptions about risk and/or the risks inherent in the inputs to the valuation technique. These inputs can be readily observable, market-corroborated, or generally unobservable inputs. The Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs. Based upon observable inputs used in the valuation techniques, the Company is required to provide information according to the fair value hierarchy.

The fair value hierarchy ranks the quality and reliability of the information used to determine fair values into three broad levels as follows:

Level 1: Valuations for assets and liabilities traded in active markets from readily available pricing sources for market transactions involving identical assets or liabilities.

Level 2: Valuations for assets and liabilities traded in less active dealer or broker markets. Valuations are obtained from third-party pricing services for identical or similar assets or liabilities.

Level 3: Valuations for assets and liabilities include certain unobservable inputs in the assumptions and projections used in determining the fair value assigned to such assets or liabilities.

In instances where the determination of the fair value measurement is based on inputs from different levels of the fair value hierarchy, the level in the fair value hierarchy within which the entire fair value measurement falls is based on the lowest level input that is significant to the fair value measurement in its entirety. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the asset or liability.

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Note 3 - Inventories

Inventories consist of the following:


	June 30,		December 31,
	2025		2024
	(unaudited)
(in thousands)
Refrigerants and cylinders	$	85,950	$	104,479
Less: net realizable value adjustments		(8,267)		(8,232)
Total	$	77,683	$	96,247

Note 4 - Property, plant and equipment

Elements of property, plant and equipment are as follows:


	June 30,		December 31,		Estimated
	2025		2024		Lives
(in thousands)	(unaudited)
Property, plant and equipment
- Land	$	1,255	$	1,255
- Land improvements		319		319	6-10 years
- Buildings		1,446		1,446	25-39 years
- Building improvements		3,591		3,569	25-39 years
- Cylinders		12,914		12,957	15-30 years
- Equipment		32,530		32,525	3-10 years
- Equipment under capital lease		315		315	5-7 years
- Vehicles		2,250		2,081	3-5 years
- Lab and computer equipment, software		3,304		3,304	2-8 years
- Furniture and fixtures		1,125		1,125	5-10 years
- Leasehold improvements		865		865	3-5 years
- Construction-in-progress		6,206		4,237
Subtotal		66,120		63,998
Less: Accumulated depreciation		(43,901)		(42,444)
Total	$	22,219	$	21,554

Depreciation expense for the six-month periods ended June 30, 2025 and 2024 was $1.5 million and $1.6 million, respectively, of which $1.2 million respectively, were included as cost of sales in the Company’s Consolidated Statements of Income.

Note 5 - Leases

The Company has various lease agreements with terms up to 11 years, including leases of buildings and various equipment. Some leases include options to purchase, terminate or extend for one or more years. These options are included in the lease term when it is reasonably certain that the option will be exercised.

At inception, the Company determines if an arrangement contains a lease and whether that lease meets the classification criteria of a finance or operating lease. Some of the Company’s lease arrangements contain lease components (e.g. minimum rent payments) and non-lease components (e.g. common area maintenance, charges, utilities and property taxes). The Company elected the package of practical expedients permitted under the transition guidance, which allows it to carry forward its historical lease classification, its assessment on whether a contract contains a lease, and its initial direct costs for any leases that existed prior to the adoption of the new standard. The Company also elected to combine lease and non-lease components and to keep leases with an initial term of 12 months or less off the balance sheet and recognize the associated lease payments in the consolidated income statements on a straight-line basis over the lease term. The Company’s lease agreements do not contain any material residual value, guarantees or material restrictive covenants.

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Operating leases are included in Right of use asset, Accrued expenses and other current liabilities, and Long-term lease liabilities on the consolidated balance sheets. These assets and liabilities are recognized at the commencement date based on the present value of remaining lease payments over the lease term using the Company’s secured incremental borrowing rates or implicit rates, when readily determinable. Short-term operating leases, which have an initial term of 12 months or less, are not recorded on the balance sheets. Lease expense for operating leases is recognized on a straight-line basis over the lease term. Variable lease expense is recognized in the period in which the obligation for those payments is incurred.

Operating lease expense of $0.9 million, for each of the six-month periods ended June 30, 2025 and 2024, respectively, is included in Selling, general and administrative expenses on the consolidated statements of income.

The following table presents information about the amount and timing of cash flows arising from the Company’s operating leases as of June 30, 2025.


	June 30,
Maturity of Lease Payments	2025
(in thousands)	(unaudited)
2025 (remaining)	$	1,301
-2026		2,305
-2027		1,823
-2028		627
-2029		547
-Thereafter		276
Total undiscounted operating lease payments		6,879
Less imputed interest		(920)
Present value of operating lease liabilities	$	5,959

Balance Sheet Classification


	June 30,		December 31,
	2025		2024
(in thousands)	(unaudited)
Current lease liabilities (recorded in Accrued expenses and other current liabilities)	$	2,020	$	1,961
Long-term lease liabilities		3,939		4,917
Total operating lease liabilities	$	5,959	$	6,878

Other Information


	June 30,		December 31,
	2025		2024
Weighted-average remaining term for operating leases	2.51	years	2.87	years
Weighted-average discount rate for operating leases	8.53	%	8.45	%

Supplemental cash flow and non-cash information related to leases


	June 30,		December 31,
	2025		2024
(in thousands)	(unaudited)
Cash paid for amounts included in measurement of lease liabilities:
Operating cash flow from operating leases	$	943	$	1,918
Right-of-use assets obtained in exchange for new operating lease liabilities	$	26	$	2,113

Note 6 - Goodwill and intangible assets

Goodwill represents the excess of the purchase price over the fair value of the net assets acquired in business combinations accounted for under the purchase method of accounting.

There was no goodwill impairment loss recognized for the six-month period ended June 30, 2025, and year ended December 31, 2024.

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Based on the results of the impairment assessments of goodwill and intangible assets performed, management concluded the fair value of the Company’s goodwill exceeds the carrying value and there are no impairment indicators related to intangible assets.

At June 30, 2025 and December 31, 2024 the Company had $62.3 million of goodwill.

The Company’s other intangible assets consist of the following:


		June 30, 2025						December 31, 2024
		(unaudited)
	Amortization	Gross						Gross
	Period	Carrying		Accumulated				Carrying		Accumulated
(in thousands)	(in years)	Amount		Amortization		Net		Amount		Amortization		Net
Intangible assets with determinable lives
Covenant not to compete	5 – 10		930		882		48		930	$	876		54
Customer relationships	2 – 12		32,680		21,711		10,969		32,680		20,246		12,434
Above market leases	13		567		343		224		567		321		246
Trade name	5		1,540		326		1,214		1,540		174		1,366
Total identifiable intangible assets		$	35,717	$	23,262	$	12,455	$	35,717	$	21,617	$	14,100

Amortization expense for the six-month periods ended June 30, 2025 and 2024 was $1.6 million and $1.5 million, respectively. Intangible assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset or asset group may not be recoverable.

Note 7 - Share-based compensation

Share-based compensation represents the cost related to share-based awards, typically stock options or stock grants, granted to employees, non-employees, officers and directors. Share-based compensation is measured at grant date, based on the estimated aggregate fair value of the award on the grant date, and such amount is charged to compensation expense on a straight-line basis (net of estimated forfeitures) over the requisite service period. For the six-month periods ended June 30, 2025 and 2024, share-based compensation expense of $0.5 million and $0.7 million, respectively, is reflected in Selling, general and administrative expenses in the Consolidated Statements of Income.

Share-based awards have historically been made as stock options, and recently also as stock grants, issued pursuant to the terms of the Company’s stock option and stock incentive plans (collectively, the “Plans”), described below. The Plans may be administered by the Board of Directors or the Compensation Committee of the Board or by another committee appointed by the Board from among its members as provided in the Plans. Presently, the Plans are administered by the Company’s Compensation Committee of the Board of Directors. As of June 30, 2025 there were an aggregate of 6,706,835 shares of the Company’s common stock available under the Plans for issuance pursuant to future stock option grants or other stock based awards.

Stock option awards, which allow the recipient to purchase shares of the Company’s common stock at a fixed price, are typically granted at an exercise price equal to the Company’s stock price at the date of grant. Typically, the Company’s stock option awards have vested from immediately to two years from the grant date and have had a contractual term ranging from three to ten years. ISOs granted under the Plans may not be granted at a price less than the fair market value of the common stock on the date of grant (or 110% of fair market value in the case of persons holding 10% or more of the voting stock of the Company). Nonqualified options granted under the Plans may not be granted at a price less than the fair market value of the common stock. Options granted under the Plans expire not more than ten years from the date of grant (five years in the case of ISOs granted to persons holding 10% or more of the voting stock of the Company).

Effective June 7, 2018, the Company adopted its 2018 Stock Incentive Plan (“2018 Plan”) pursuant to which 4,000,000 shares of common stock were reserved for issuance (i) upon the exercise of options, designated as either ISOs under the Code or nonqualified options, or (ii) as stock, deferred stock or other stock-based awards. ISOs may be granted under the 2018 Plan to employees and officers of the Company. Non-qualified options, stock, deferred stock or other stock-based awards may be granted to consultants, directors (whether or not they are employees), employees or officers of the Company. Stock appreciation rights may also be issued in tandem with stock options. Unless the 2018 Plan is sooner terminated, the ability to grant options or other awards under the 2018 Plan will expire on June 7, 2028.

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Effective June 11, 2020, the Company adopted its 2020 Stock Incentive Plan (“2020 Plan”) pursuant to which 3,000,000 shares of common stock were reserved for issuance (i) upon the exercise of options, designated as either ISOs under the Code or nonqualified options, or (ii) as stock, deferred stock or other stock-based awards. ISOs may be granted under the 2020 Plan to employees and officers of the Company. Non-qualified options, stock, deferred stock or other stock-based awards may be granted to consultants, directors (whether or not they are employees), employees or officers of the Company. Stock appreciation rights may also be issued in tandem with stock options. Unless the 2020 Plan is sooner terminated, the ability to grant options or other awards under the 2020 Plan will expire on June 11, 2030.

Effective June 12, 2024, the Company adopted its 2024 Stock Incentive Plan (“2024 Plan”) pursuant to which 3,000,000 shares of common stock were reserved for issuance (i) upon the exercise of options, designated as either ISOs under the Code or nonqualified options, or (ii) as stock, deferred stock or other stock-based awards. ISOs may be granted under the 2024 Plan to employees and officers of the Company. Non-qualified options, stock, deferred stock or other stock-based awards may be granted to consultants, directors (whether or not they are employees), employees or officers of the Company. Stock appreciation rights may also be issued in tandem with stock options. Unless the 2024 Plan is sooner terminated, the ability to grant options or other awards under the 2024 Plan will expire on June 12, 2034.

All stock options have been granted to employees and non-employees at exercise prices equal to or in excess of the market value on the date of the grant.

The Company determines the fair value of share-based awards at the grant date by using the Black-Scholes option-pricing model, and has utilized the simplified method to compute expected lives of share-based awards. There were options to purchase 459,630 and 133,371 shares of common stock granted during the six – month periods ended June 30, 2025 and 2024, respectively.

A summary of the activity for stock options issued under the Company’s Plans for the indicated periods is presented below:


		Weighted
		Average
		Exercise
Stock Options and Stock Appreciation Rights	Shares	Price
Outstanding at December 31, 2023	2,647,435	$	3.31
-Cancelled	(10,176)	$	4.54
-Exercised	(39,402)	$	7.24
-Granted (1)	135,603	$	10.85
Outstanding at December 31, 2024	2,733,460	$	3.63
-Cancelled	(22,956)	$	9.86
-Exercised	(216,784)	$	1.62
-Granted (2)	459,630	$	6.23
Outstanding at June 30, 2025	2,953,350	$	4.16

(1)	Options to purchase 135,603 shares were granted in 2024, of which options to purchase 111,975 shares vested immediately in 2024 and the remainder vested 50% immediately and 50% one year after the date of the grants.

(2)	Options to purchase 459,630 shares were granted in 2025, of which options to purchase 68,490 shares vested immediately in 2025, while the remainder are subject to cliff vesting on December 31, 2027, contingent upon the achievement of performance-based metrics.

The following is the weighted average contractual life in years and the weighted average exercise price at June 30, 2025 of:


		Weighted
		Average	Weighted
		Remaining	Average
	Number of	Contractual	Exercise
	Options	Life	Price
Options outstanding and vested	2,562,210	3.01 years	$	3.88

The intrinsic value of options outstanding at June 30, 2025 and December 31, 2024 was $13.2 million and $8.6 million, respectively.

The intrinsic value of options unvested at June 30, 2025 and December 31, 2024 was $0.8 million and $0.0 million, respectively.

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The intrinsic value of options exercised during the six months ended June 30, 2025 and 2024 were $1.3 million and $0.2 million, respectively.

Note 8 - Short-term and Long-term debt

Revolving Credit Facility

On March 2, 2022, Hudson Technologies Company (“HTC”) and Hudson Holdings, Inc. (“Holdings”), as borrowers (collectively, the “Borrowers”), and Hudson Technologies, Inc. (the “Company”) as a guarantor, entered into an Amended and Restated Credit Agreement (the “Amended Wells Fargo Facility”) with Wells Fargo Bank, National Association, as administrative agent and lender (“Agent” or “Wells Fargo”) and such other lenders as have or may thereafter become a party to the Amended Wells Fargo Facility. The Amended Wells Fargo facility amended and restated the prior Wells Fargo Facility entered into on December 19, 2019.

Under the terms of the Amended Wells Fargo Facility, the Borrowers: (i) immediately borrowed $15 million in the form of a “first in last out” term loan (the “FILO Tranche”) and (ii) could initially borrow from time to time, up to $75 million at any time consisting of revolving loans (the “Revolving Loans”) in a maximum amount up to the lesser of $75 million and a borrowing base that is calculated based on the outstanding amount of the Borrowers’ eligible receivables and eligible inventory, as described in the Amended Wells Fargo Facility. The Amended Wells Fargo Facility also initially contained a sublimit of $9 million for swing line loans and $2 million for letters of credit. The Company currently has a $0.9 million letter of credit outstanding. The FILO Tranche was repaid in full in July 2023 and may not be reborrowed.

Amounts borrowed under the Amended Wells Fargo Facility may be used for working capital needs, certain permitted acquisitions, and to reimburse drawings under letters of credit.

Interest under the Amended Wells Fargo Facility is payable in arrears on the first day of each month. Interest charges with respect to Revolving Loans are computed on the actual principal amount of Revolving Loans outstanding at a rate per annum equal to (A) with respect to Base Rate loans, the sum of (i) a rate per annum equal to the higher of (1) 1.0%, (2) the federal funds rate plus 0.5%, (3) one month term SOFR plus 1.0%, and (4) the prime commercial lending rate of Wells Fargo, plus (ii) between 1.25% and 1.75% depending on average monthly undrawn availability and (B) with respect to SOFR loans, the sum of the applicable SOFR rate plus between 2.36% and 2.86% depending on average quarterly undrawn availability. The Amended Wells Fargo Facility also includes a monthly unused line fee ranging from 0.35% to 0.75% per annum determined based upon the level of average Revolving Loans outstanding during the immediately preceding month measured against the total Revolving Loans that may be borrowed under the Amended Wells Fargo Facility.

In connection with the closing of the Amended Wells Fargo Facility, the Company also entered into a First Amendment to Guaranty and Security Agreement, dated as of March 2, 2022 (the “Amended Revolver Guaranty and Security Agreement”), pursuant to which the Company and certain subsidiaries are continuing to unconditionally guarantee the payment and performance of all obligations owing by Borrowers to Wells Fargo, as Agent for the benefit of the revolving lenders. Pursuant to the Amended Revolver Guaranty and Security Agreement, Borrowers, the Company and certain other subsidiaries are continuing to grant to the Agent, for the benefit of the Wells Fargo Facility lenders, a security interest in substantially all of their respective assets, including receivables, equipment, general intangibles (including intellectual property), inventory, subsidiary stock, real property, and certain other assets.

The Amended Wells Fargo Facility contains a financial covenant requiring the Company to maintain at all times minimum liquidity (defined as availability under the Amended Wells Fargo Facility plus unrestricted cash) of at least $5 million, of which at least $3 million must be derived from availability. The Amended Wells Fargo Facility also contains a springing covenant, which takes effect only upon a failure to maintain undrawn availability of at least $11.25 million or upon an election by the Borrowers to increase the inventory component of the borrowing base, requiring the Company to maintain a Fixed Charge Coverage Ratio (FCCR) of not less than 1.00 to 1.00, as of the end of each trailing period of twelve consecutive months commencing with the month prior to the triggering of the covenant. The FCCR (as defined in the Wells Fargo Facility) is the ratio of (a) EBITDA for such period, minus unfinanced capital expenditures made during such period, to (b) the aggregate amount of (i) interest expense required to be paid (other than interest paid-in-kind, amortization of financing fees, and other non-cash interest expense) during such period, (ii) scheduled principal payments (but excluding principal payments relating to outstanding Revolving Loans under the Amended Wells Fargo Facility), (iii) all net federal, state, and local income taxes required to be paid during such period (provided, that any tax refunds received shall be applied to the period in which the cash outlay for such taxes was made), (iv) all restricted payments paid (as defined in the Amended Wells Fargo Facility) during such period, and (v) to the extent not otherwise deducted from EBITDA for such period, all payments required to be made during such period in respect of any funding deficiency or funding shortfall with respect to any pension plan. The FCCR covenant ceases after the Borrowers have been in compliance therewith for two consecutive months.

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The Amended Wells Fargo Facility also contains customary non-financial covenants relating to the Company and the Borrowers, including limitations on Borrowers’ ability to pay dividends on common stock or preferred stock, and also includes certain events of default, including payment defaults, breaches of representations and warranties, covenant defaults, cross-defaults to other obligations, events of bankruptcy and insolvency, certain ERISA events, judgments in excess of specified amounts, impairments to guarantees and a change of control.

The Company evaluated the Amended Wells Fargo Facility in accordance with the provisions of ASC 470 to determine if the amendment and restatement was a modification or an extinguishment of debt and concluded that the amendment and restatement was a modification of the original revolving credit facility for accounting purposes. As a result, the Company capitalized an additional $0.9 million of deferred financing costs in connection with the amendment and restatement, which, along with the $0.2 million of remaining deferred financing costs of the original revolving facility, is being amortized over the five year term of the Amended Wells Fargo Facility.

On June 6, 2024, the Borrowers and the Company entered into a First Amendment to Amended and Restated Credit Agreement and Limited Consent (the “First Amendment”) with Wells Fargo and the lenders under the Amended Wells Fargo Facility. Pursuant to the First Amendment, Wells Fargo and the other lenders consented to the consummation of the USA Refrigerants Acquisition and made certain other technical amendments to the existing Amended Wells Fargo Facility, including the calculation of the borrowing base thereunder. The First Amendment also provided for permitted stock repurchases by the Company in an amount not to exceed $5 million per calendar year, and $15 million in aggregate over the term of the Amended Wells Fargo Facility, upon satisfaction of certain conditions.

On October 23, 2024, the Borrowers and the Company entered into a Second Amendment to Amended and Restated Credit Agreement (the “Second Amendment”) with Wells Fargo and the lenders under the Amended Wells Fargo Facility. The Second Amendment amends the provision relating to permitted stock repurchases by the Company, to permit stock repurchases in an amount not to exceed $10 million per calendar year in each of 2024 and 2025 and $5 million in any calendar year thereafter during the term of the Amended Wells Fargo Facility, upon satisfaction of certain conditions, subject to an aggregate cap of $25 million.

On June 23, 2025, the Borrowers and the Company entered into a Third Amendment to Amended and Restated Credit Agreement (the “Third Amendment”) with Wells Fargo and the lenders under the Amended Wells Fargo Facility. The Third Amendment reduced the amount of Revolving Loans that may be made under the Amended Wells Fargo Facility from $75 million to $40 million, and also provided for the reduction of the letter of credit sublimit from $2 million to $1.5 million. The Third Amendment also amended certain other thresholds and sub-limits in the Amended Wells Fargo Facility, as further specified therein.

The commitments under the Amended Wells Fargo Facility will expire and the full outstanding principal amount of the loans, together with accrued and unpaid interest, are due and payable in full on March 2, 2027, unless the commitments are terminated and the outstanding principal amount of the loans are accelerated sooner following an event of default or in the event of certain other cross-defaults.

At June 30, 2025, the Company had borrowing availability of approximately $40 million from the Amended Wells Fargo Facility and no balance was outstanding.

The Company was in compliance with all covenants under the Amended Wells Fargo Facility as of June 30, 2025.

The Company’s ability to comply with these covenants in future quarters may be affected by events beyond the Company’s control, including general economic conditions, weather conditions, regulations and refrigerant pricing. Therefore, the Company cannot make any assurance that it will continue to be in compliance during future periods.

Note 9 – Accrued expenses and other current liabilities

Elements of Accrued expenses and other current liabilities are as follows:


	June 30,		December 31,
	2025		2024
	(unaudited)
(in thousands)
Accrued expenses	$	13,741	$	12,320
Cylinder deposits		21,951		19,426
Lease obligations		2,020		1,961
Other current liabilities		228		106
Total	$	37,940	$	33,813

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Note 10 – Acquisition

The following table summarizes the final fair values of the assets acquired and liabilities assumed from the USA Refrigerants Acquisition:

Consideration


Cash	$	20,670
Contingent consideration		1,600
Total consideration transferred	$	22,270

Identifiable assets acquired


	Amortization life	Fair Value
	(in months)	(in thousands)
Inventories		$	5,073
Covenant not to compete	60		60
Customer relationships	24		1,120
Tradename	60		1,540
Total identified assets			7,793
Goodwill			14,477
Total net assets acquired		$	22,270

The fair values of the acquired intangibles were determined using discounted cash flow models using a discount factor based on an estimated risk-adjusted weighted average cost of capital. The customer relationships were valued using the multi-period excess-earnings method, a form of the income approach.

The acquisition resulted in the recognition of $14.5 million of goodwill, which will be deductible for tax purposes. Goodwill largely consists of expected growth in revenue from new customer acquisitions over time.

The following table provides unaudited pro forma total revenues and results of operations for the periods ended June 30, 2025 and 2024 as if USA Refrigerants had been acquired on January 1, 2022. The unaudited pro forma results reflect certain adjustments related to the acquisition, such as a step-up in basis in inventory, and amortization expense on intangible assets arising from the acquisition. The pro forma results do not include any anticipated cost synergies or other effects of any planned integration. Accordingly, such pro forma amounts are not necessarily indicative of the results that actually would have occurred had the USA Refrigerants Acquisition been completed at the beginning of 2022, nor are they indicative of the future operating results of the combined companies (dollars in thousands):


	Three Months				Six Months
	ended June 30,				ended June 30,
	2025		2024		2025		2024
(in thousands)
Revenues	$	72,849	$	79,749	$	128,192	$	149,465
Net Income	$	10,168	$	10,757	$	12,926	$	21,491

In relation to the USA Refrigerants Acquisition, the Company incurred acquisition costs of $0.0 million and $0.3 million for the six-month periods ended June 30, 2025 and 2024, respectively, which are included in selling, general and administrative expenses in the consolidated statements of income.

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Note 11 – Share repurchases

In August 2024, the Company’s board of directors authorized the repurchase of up to $10 million of outstanding common stock during 2024 and 2025. In October 2024, the Company’s board of directors approved an increase to the program pursuant to which the Company may now repurchase up to $20 million of outstanding common stock (consisting of up to $10 million in shares during each of calendar year 2024 and 2025). Purchases will be funded from the Company’s available cash and cash flow. The Company may purchase shares of its common stock on a discretionary basis from time to time through open market repurchases or privately negotiated transactions or through other means, including by entering into Rule 10b5-1 trading plans, in each case, during an “open window” and when the Company does not possess material non-public information. The timing and actual number of shares repurchased under the repurchase program will depend on a variety of factors, including stock price, trading volume, market conditions, corporate and regulatory requirements and other general business considerations. The repurchase program may be modified, suspended or discontinued at any time without prior notice. During the three-month period ended June 30, 2025, the Company repurchased 495,065 shares, totaling $2.7 million, at an average price of $5.46 per share. During the six-month period ended June 30, 2025, the Company repurchased 803,653 shares, totaling $4.5 million, at an average price of $5.64 per share. The average prices paid for these shares do not include commissions. These repurchased shares were retired.

Note 12 – Segment information

The Company determines operating segments based on how its CODM manages the business, makes operating decisions around the allocation of resources, and evaluates operating performance. The Company’s CODM are its Chief Executive Officer, Chief Financial Officer and Senior Vice President of Sales and Marketing, who review its operating results on a consolidated basis. The Company operates in one segment and has one reportable segment.

The Company’s CODM use consolidated net income, as shown on the consolidated income statements as the measure of segment profitability. The CODM use net income to evaluate the Company’s ongoing operations and for internal planning and forecasting purposes. This analysis is used in making strategic investment decisions. The Company’s measure of segment assets is reported on the consolidated balance sheets as total assets.


Six-Month Period Ended June 30,	2025		2024
(in thousands)
Revenues	$	128,192	$	140,532
Less:
Cost of materials and plant overhead		85,887		89,644
Payroll expense and benefits		16,693		15,522
Interest (income) expense		(1,227)		366
Depreciation and amortization		3,147		3,022
Professional fees		2,787		3,102
Other operating expenses¹		3,879		3,668
Income taxes		4,100		6,061
Net income	$	12,926	$	19,147

¹Other operating expenses include miscellaneous, individually insignificant operating expenses. The Company’s CODM reviews these items in aggregate.

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Item 2 - Management’s Discussion and Analysis of Financial Condition and Results of Operations

Certain statements, contained in this section and elsewhere in this Form 10-Q, constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. 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 laws and regulations affecting the industry, changes in the demand and price 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 that 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, the ability to meet financial covenants under our financing facility, 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 Company may seek to conduct business, the Company’s ability to successfully integrate any assets it acquires from third parties into its operations, and other risks detailed in the Company’s Form 10-K for the year ended December 31, 2024, and in the Company’s other subsequent filings with the Securities and Exchange Commission (“SEC”). 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.

Critical Accounting Estimates

The Company’s discussion and analysis of its financial condition and results of operations are based upon its consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these consolidated financial statements requires the Company to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses and related disclosure of contingent assets and liabilities. Several of the Company’s accounting policies involve significant judgments, uncertainties and estimates. The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities. Actual results may differ from these estimates under different assumptions or conditions. To the extent that actual results differ from management’s judgments and estimates, there could be a material adverse effect on the Company. On a continuous basis, the Company evaluates its estimates, including, but not limited to, those estimates related to its inventory reserves, goodwill and intangible assets.

Inventory

For inventory, the Company evaluates both current and anticipated sales prices of its products to determine if a write down of inventory to net realizable value is necessary. Net realizable value represents the estimated selling price in the ordinary course of business, less reasonably predictable costs of completion and disposal. The determination if a write-down to net realizable value is necessary is primarily affected by the market prices for the refrigerant gases we sell. Commodity prices generally are affected by a wide range of factors beyond our control, including weather, seasonality, the availability and adequacy of supply, government regulation and policies and general political and economic conditions. At any time, our inventory levels may be substantial and fluctuate, which will materially impact our estimates of net realizable value.

Overview

The Company is a leading provider of sustainable refrigerant products and services to the Heating Ventilation Air Conditioning and Refrigeration (“HVACR”) industry. For nearly three decades, we have demonstrated our commitment to our customers and the environment by becoming one of the United States’ largest refrigerant reclaimers through multimillion dollar investments in the plants and advanced separation technology required to recover a wide variety of refrigerants and restoring them to Air-Conditioning, Heating, and Refrigeration Institute (“AHRI”) standard for reuse as certified EMERALD Refrigerants™.

The Company’s products and services are primarily used in commercial air conditioning, industrial processing and refrigeration systems, and include refrigerant and industrial gas sales, refrigerant management services consisting primarily of reclamation of refrigerants and RefrigerantSide® Services performed at a customer’s site, which include system decontamination to remove moisture, oils and other contaminants.

Sales of refrigerants continue to represent a significant majority of the Company’s revenues.

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The Company also sells industrial gases to a variety of industry customers, predominantly to users in, or involved with, the US Military. In July 2016, the Company was awarded, as prime contractor, a five-year fixed price contract, including a five-year renewal option which has been exercised, awarded to it by the United States Defense Logistics Agency (“DLA”) for the management and supply of refrigerants, compressed gases, cylinders and related items to US Military commands and installations, Federal civilian agencies and foreign militaries. Primary users include the US Army, Navy, Air Force, Marine Corps and Coast Guard. Our contract with DLA expires in July 2026.

Results of Operations

Three-month period ended June 30, 2025 as compared to the three-month period ended June 30, 2024

Revenues for the three-month period ended June 30, 2025 were $72.8 million, a decrease of $2.5 million or 3% from the $75.3 million reported during the comparable 2024 period. The decrease is primarily due to lower volume of refrigerants sold, as a result of a slower start to the cooling season in the North-East and Mid-West reflecting milder weather through the beginning of June, which was partially offset by an increase in the average sales price of refrigerants sold.

Gross profit and gross margin for the three-month period ended June 30, 2025, were $22.8 million and 31% respectively, an increase of $0.2 million and 1% respectively from the $22.6 million and 30% reported during the comparable 2024 period. The increase was primarily driven by an increase in the average sales price of refrigerants.

Selling, general and administrative (“SG&A”) expenses for the three-month period ended June 30, 2025 were $9.3 million, an increase of $0.3 million from the $9.0 million reported during the comparable 2024 period due to an increase in staffing costs.

Amortization expense for the three-month periods ended June 30, 2025 and 2024 was $0.8 million.

Net interest income for the three-month period ended June 30, 2025 was $0.7 million, compared to net interest expense of $0.2 million reported during the comparable 2024 period reflecting the Company’s unlevered balance sheet and higher cash position.

The income tax expense for the three-month period ended June 30, 2025 was $3.2 million compared to income tax expense of $3.1 million for the three-month period ended June 30, 2024. Income tax expense for federal and state income tax purposes was determined by applying statutory income tax rates to pre-tax income after adjusting for certain items.

The net income for the three-month period ended June 30, 2025 was $10.2 million, an increase of $0.6 million from the $9.6 million of net income reported during the comparable 2024 period primarily due to the increased average selling prices for refrigerants sold, partially offset by a decrease in refrigerant sales volume.

Six-month period ended June 30, 2025 as compared to the six-month period ended June 30, 2024

Revenues for the six-month period ended June 30, 2025 were $128.2 million, a decrease of $12.3 million or 9% from the $140.5 million reported during the comparable 2024 period. The decrease was attributable to both lower selling prices and slightly lower volume of refrigerants sold.

Gross profit and gross margin for the six-month period ended June 30, 2025, were $34.9 million and 27% respectively, a decrease of $9.2 million and 4% respectively from the $44.0 million and 31% reported during the comparable 2024 period. The gross margin reduction in the 2025 period was primarily a result of the lower average selling prices of refrigerants sold.

Selling, general and administrative (“SG&A”) expenses for the six-month period ended June 30, 2025 were $17.4 million, an increase of $0.4 million from the $17.0 million reported during the comparable 2024 period. The increase in SG&A was primarily due to an increase in staffing.

Amortization expense for the six-month periods ended June 30, 2025 and 2024 was $1.6 million and $1.5 million, respectively.

Net interest income for the six-month period ended June 30, 2025 was $1.2 million, compared to net interest expense of $0.4 million reported during the comparable 2024 period reflecting the Company’s unlevered balance sheet and higher cash position.

The income tax expense for the six-month period ended June 30, 2025 was $4.1 million compared to income tax expense of $6.1 million for the six-month period ended June 30, 2024. Income tax expense for federal and state income tax purposes was determined by applying statutory income tax rates to pre-tax income after adjusting for certain items.

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Net income for the six-month period ended June 30, 2025 was $12.9 million, a decrease of $6.2 million from the $19.1 million of net income reported during the comparable 2024 period. The decrease was attributable to both lower selling prices and slightly lower sales volume of refrigerants sold and higher SG&A costs, as described above.

Liquidity and Capital Resources

At June 30, 2025, the Company had working capital, which represents current assets less current liabilities, of $157.8 million, an increase of $10.1 million from the working capital of $147.7 million at December 31, 2024. The increase in working capital is primarily attributable to a rise in cash.

Inventories and trade receivables are principal components of current assets. At June 30, 2025, the Company had inventories of $77.7 million, a decrease of $18.5 million from $96.2 million at December 31, 2024. The Company’s ability to sell and replace its inventory on a timely basis and the prices at which it can be sold are subject, among other things, to current market conditions and the nature of supplier or customer arrangements and the Company’s ability to source CFC and HCFC based refrigerants (which are no longer being produced) and HFC refrigerants (with newly manufactured production currently in the process of being phased down) and HFO refrigerants.

At June 30, 2025, the Company had trade receivables, net of allowance for credit losses, of $35.9 million, an increase of $22.3 million from $13.6 million at December 31, 2024, mainly due to seasonal timing. The Company typically generates its most significant revenue during the second and third quarters of any given year. The Company’s trade receivables are concentrated with various wholesalers, brokers, contractors and end-users within the refrigeration industry that are primarily located in the continental United States. The Company has historically financed its working capital requirements through cash flows from operations, debt, and the issuance of equity securities.

Net cash provided by operating activities for the six-month period ended June 30, 2025 was $20.6 million, when compared to net cash provided by operating activities of $40.8 million for the comparable 2024 period. The higher cash flow in the 2024 period was primarily driven by the acquisition of the USA Refrigerants. Another contributory factor was the timing of accounts receivable, inventories, accounts payable and accrued expenses.

Net cash used in investing activities for the six-month period ended June 30, 2025 was $1.9 million compared with net cash used in investing activities of $22.8 million for the comparable 2024 period, mainly due to recent acquisition of USA Refrigerants as previously discussed and timing of capital expenditures related to capitalization of the Company’s replacement ERP system.

Net cash used in financing activities for the six-month period ended June 30, 2025 was $4.5 million compared with net cash used in financing activities of $0.0 million for the comparable 2024 period. For the period ended June 30, 2025, the Company repurchased 803,653 shares of its common stock, at a cost of $4.5 million.

At June 30, 2025, cash and cash equivalents were $84.3 million, or approximately $14.2 million higher than the $70.1 million of cash and cash equivalents at December 31, 2024.

Revolving Credit Facility

Amounts borrowed under the Amended Wells Fargo Facility may be used for working capital needs, certain permitted acquisitions, and to reimburse drawings under letters of credit.

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The Amended Wells Fargo Facility also contains customary non-financial covenants relating to the Company and the Borrowers, including limitations on the Borrowers’ ability to pay dividends on common stock or preferred stock, and also includes certain events of default, including payment defaults, breaches of representations and warranties, covenant defaults, cross-defaults to other obligations, events of bankruptcy and insolvency, certain ERISA events, judgments in excess of specified amounts, impairments to guarantees and a change of control.

The Company evaluated the Amended Wells Fargo Facility in accordance with the provisions of ASC 470-50 to determine if the amendment and restatement was a modification or an extinguishment of debt and concluded that the amendment and restatement was a modification of the original revolving credit facility for accounting purposes. As a result, the Company capitalized an additional $0.9 million of deferred financing costs in connection with the amendment and restatement, which, along with the $0.2 million of remaining deferred financing costs of the original revolving facility, is being amortized over the five year term of the Amended Wells Fargo Facility.

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At June 30, 2025, the Company had borrowing availability of approximately $40 million from the Amended Wells Fargo Facility and no balance was outstanding.

The Company was in compliance with all covenants under the Amended Wells Fargo Facility as of June 30, 2025.

The Company believes that it will be able to satisfy its working capital requirements for the foreseeable future from anticipated cash flows from operations and available funds under the Amended Wells Fargo Facility. Any unanticipated expenses, including, but not limited to, an increase in the cost of refrigerants purchased by the Company, an increase in operating expenses or failure to achieve expected revenues from the Company’s RefrigerantSide® Services and/or refrigerant sales or additional expansion or acquisition costs that may arise in the future would adversely affect the Company’s future capital needs. There can be no assurance that any of the Company’s proposed or future plans will be successful, and as such, the Company may require additional capital sooner than anticipated, which capital may not be available on acceptable terms, or at all.

Inflation

Inflation, historically or the recent increase, has not had a material impact on the Company’s operations.

Reliance on Suppliers and Customers

The Company participates in an industry that is highly regulated, and changes in the regulations affecting our business could affect our operating results. Currently the Company purchases virgin HCFC and HFC refrigerants and reclaimable, primarily HCFC and CFC, refrigerants from suppliers and its customers. Under the Clean Air Act the phase-down of future production of certain virgin HCFC refrigerants commenced in 2010 and has been fully phased out by the year 2020, and production of all virgin HCFC refrigerants is scheduled to be phased out by the year 2030. To the extent that the Company is unable to source sufficient quantities of refrigerants or is unable to obtain refrigerants on commercially reasonable terms or experiences a decline in demand and/or price for refrigerants sold by it, the Company could realize reductions in revenue from refrigerant sales, which could have a material adverse effect on the Company’s operating results and financial position.

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Seasonality and Weather Conditions 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, non-recurring refrigerant and service sales, availability and price of refrigerant products (virgin or reclaimable), changes in reclamation technology and regulations, timing in introduction and/or retrofit or replacement of refrigeration equipment, the rate of expansion of the Company’s operations, and by other factors. The Company’s business is seasonal in nature with peak sales of refrigerants occurring in the first nine months of each year. During past years, the seasonal decrease in sales of refrigerants has resulted in losses particularly in the fourth quarter of the year. In addition, to the extent that there is unseasonably cool weather throughout the spring and summer months, which would adversely affect the demand for refrigerants, there would be a corresponding negative impact on the Company. Delays or inability in securing adequate supplies of refrigerants at peak demand periods, lack of refrigerant demand, increased expenses, declining refrigerant prices and a loss of a principal customer could result in significant losses. There can be no assurance that the foregoing factors will not occur and result in a material adverse effect on the Company’s financial position and significant losses. The Company believes that to a lesser extent there is a similar seasonal element to RefrigerantSide® Service revenues as refrigerant sales.

Recent Accounting Pronouncements

See recent accounting pronouncements set forth in Note 1 of the financial statements contained in this report.

Item 3 - Quantitative and Qualitative Disclosures about Market Risk

Interest Rate Sensitivity

We are exposed to market risk from fluctuations in interest rates on the Amended Wells Fargo Facility. The Amended Wells Fargo Facility is a $40 million secured facility with a $0.0 million outstanding balance as of June 30, 2025. Future interest rate changes on our borrowing under the Amended Wells Fargo Facility may have an impact on our consolidated results of operations.

Refrigerant Market

We are also exposed to market risk from fluctuations in the demand, price and availability of refrigerants. To the extent that the Company is unable to source sufficient quantities of refrigerants or is unable to obtain refrigerants on commercially reasonable terms or experiences a decline in demand and/or price for refrigerants sold by the Company, the Company could realize reductions in revenue from refrigerant sales or write-downs of inventory, which could have a material adverse effect on our consolidated results of operations.

Item 4 - Controls and Procedures

Disclosure Controls and Procedures

The Company, under the supervision and with the participation of the Company’s management, including the Company’s Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of the Company’s disclosure controls and procedures, as defined in Rule 13a-15(e) of the Securities Exchange Act of 1934, as amended (“Exchange Act”), as of the end of the period covered by this report. Based on that evaluation, the Chief Executive Officer and the Chief Financial Officer have concluded that the Company’s disclosure controls and procedures were effective and provided reasonable assurance that information required to be disclosed in reports filed under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the Securities and Exchange Commission, and that such information is accumulated and communicated to the Company’s management, including its principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure. Because of the inherent limitations in all control systems, any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and management necessarily is required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Furthermore, the Company’s controls and procedures can be circumvented by the individual acts of some persons, by collusion of two or more people or by management override of the control and misstatements due to error or fraud may occur and not be detected on a timely basis.

Changes in Internal Control over Financial Reporting

As required by Rule 13a-15(d) of the Exchange Act, our management, including our principal executive officer and our principal financial officer, conducted an evaluation of the internal control over financial reporting to determine whether any changes occurred during the quarter ended June 30, 2025, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. Based on that evaluation, our principal executive officer and principal financial officer concluded there were no such changes.

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PART II – OTHER INFORMATION

Item 1A – Risk Factors

Please refer to the Risk Factors in Part I, Item 1A of the Company’s Form 10-K for the year ended December 31, 2024. There have been no material changes to such matters during the quarter ended June 30, 2025.

Item 2 – Unregistered Sales of Equity Securities and Use of Proceeds

HUDSON TECHNOLOGIES, INC.

ISSUER PURCHASES OF EQUITY SECURITIES


					Approximate
					Dollar Value of
				Total Number of	Shares that May
				Shares Purchased	Yet be Purchased
	Total Number			as Part of Publicly	Under the
	of Shares	Average Price Paid		Announced	Program (millions
Period	Purchased (1)	Per Share*		Program	of dollars) (2)
					$	8.2
April 1-30, 2025	495,065	$	5.46	495,065	$	5.5
May 1-31, 2025	—		—	—	$	5.5
June 1-30, 2025	—	$	—	—	$	5.5
Total	495,065	$	5.46	495,065	$	5.5

(1)

On August 6, 2024, the Company announced that its Board of Directors approved a share repurchase program pursuant to which the Company may purchase up to $10 million in shares of the Company’s common stock during 2024 and 2025 (the “Repurchase Program”). Under the terms of the Repurchase Program, the Company may purchase shares of its common stock on a discretionary basis from time to time through open market repurchases or privately negotiated transactions or through other means, including by entering into Rule 10b5-1 trading plans, in each case, during an “open window” and when the Company does not possess material non-public information. The timing and actual number of shares repurchased under the Repurchase Program will depend on a variety of factors, including stock price, trading volume, market conditions, corporate and regulatory requirements and other general business considerations. The Repurchase Program may be modified, suspended or discontinued at any time without prior notice. Repurchases under the Repurchase Program may be funded from the Company’s existing cash and cash equivalents, and future cash flow.

(2)

On October 25, 2024, the Company announced that its Board of Directors approved an increase to its previously disclosed repurchase program pursuant to which the Company may now purchase up to $20 million in shares of the Company’s common stock (consisting of up to $10 million in shares during each of calendar year 2024 and 2025) (as amended, the “Repurchase Program”).

*Average Price Paid Per Share does not include commissions

Item 5 – Other Information

No director or officer of the Company adopted or terminated a Rule 10b5-1 trading arrangement and/or a non-rule 10b5-1 trading arrangement (as such terms are defined in Item 408(a) of Regulation S-K) during the quarter ended June 30, 2025.

On July 31, 2025, the Company entered into an agreement with Brian J. Bertaux, its Vice President, Chief Financial Officer and Secretary, pursuant to which Mr. Bertaux has agreed to certain covenants and restrictions, which include an agreement that Mr. Bertaux will not compete with the Company in the United States for a period of twelve months after his termination for any reason. The agreement also provides that Mr. Bertaux is entitled to sick leave for up to one hundred twenty days with continuation of at least 75% of Mr. Bertaux’s salary after the commencement of his sick leave. The agreement further provides that in the event of his involuntary separation without cause, or in the event he becomes disabled, or in the event of his voluntary separation for a good reason as enumerated in the agreement, Mr. Bertaux will receive severance payments, in the form of the continuation of his annual base salary and benefits for a period of twelve months, and a lump sum payment, subject to performance criteria, equivalent to the highest bonus paid to him in the three years prior to his termination, pro-rated to the date of his termination. In addition, the agreement provides that in the event of his involuntary separation without cause, or in the event he becomes disabled, or in the event of his voluntary separation for a good reason as enumerated in the agreement, all stock options, stock appreciation rights, and any similar rights which Mr. Bertaux holds on the date of termination of employment shall become fully vested and be exercisable on the date of termination of employment, and shall remain exercisable following the termination of employment until (i) expiration

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of the twelve month severance period, (ii) termination of severance benefits due to a breach of the agreement by Mr. Bertaux, or (iii) expiration of the original term of the stock option, stock appreciation right or similar right, whichever first occurs.

Item 6 - Exhibits

Exhibit Number		Description

10.1		Agreement dated July 31, 2025 between Hudson Technologies, Inc., Hudson Technologies Company and Brian J. Bertaux*

31.1		Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

31.2		Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

32.1		Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

32.2		Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

101		Interactive Data Files Pursuant to Rule 405 of Regulation S-T

104		Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

*Denotes management compensation plan, agreement or arrangement.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this Report to be signed on its behalf by the undersigned thereunto duly authorized.

	HUDSON TECHNOLOGIES, INC.

By:	/s/ Brian F. Coleman	August 1, 2025
	Brian F. Coleman	Date
	Chairman of the Board, President and Chief Executive Officer

By:	/s/ Brian J. Bertaux	August 1, 2025
	Brian J. Bertaux	Date
	Chief Financial Officer

Source:

FAQ

How did Hudson Technologies鈥� Q2 2025 revenue compare to last year?

Q2 2025 revenue was $72.9 million, down 3.2% from $75.3 million in Q2 2024.

What were HDSN鈥檚 Q2 2025 earnings per share?

Diluted EPS increased to $0.23, up from $0.20 in the prior-year quarter.

How much cash does Hudson Technologies have?

Cash and cash equivalents totaled $84.3 million at June 30, 2025.

Did the company repurchase shares in 2025?

Yes, Hudson repurchased 803,653 shares for $4.5 million during the first six months of 2025.

What impact does the EPA AIM Act have on Hudson?

The AIM Act鈥檚 40% HFC production cut (2024-2029) increases demand for reclaimed refrigerants, a key business line for Hudson.

What is the status of the USA Refrigerants acquisition?

The $20.7 million cash deal closed on June 6, 2024; up to $2 million additional earn-out may be paid in 18 months.

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How did Hudson Technologies鈥� Q2 2025 revenue compare to last year?

What were HDSN鈥檚 Q2 2025 earnings per share?

How much cash does Hudson Technologies have?

Did the company repurchase shares in 2025?

What impact does the EPA AIM Act have on Hudson?

What is the status of the USA Refrigerants acquisition?

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[10-Q] Hudson Technologies Inc Quarterly Earnings Report

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Equity Research Analyst neutral

Industrial Gases Specialist positive

FAQ

How did Hudson Technologies鈥� Q2 2025 revenue compare to last year?

What were HDSN鈥檚 Q2 2025 earnings per share?

How much cash does Hudson Technologies have?

Did the company repurchase shares in 2025?

What impact does the EPA AIM Act have on Hudson?

What is the status of the USA Refrigerants acquisition?

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