Hudson Technologies Reports First Quarter 2002 Results; Revenues Increase 21%

Business Wire, May 6, 2002

Business & Technology Editors

PEARL RIVER, N.Y.--(BUSINESS WIRE)--May 6, 2002

Hudson Technologies, Inc. (Nasdaq: HDSN), a leading refrigerant services company specializing in proprietary on-site decontamination services for large comfort and process cooling systems, today announced results for the first quarter ended March 31, 2002.

Revenues for the first quarter ended March 31, 2002, totaled $6,111,000 compared to $5,030,000 for the comparable period in 2001. During the first quarter of 2002, the company reported a net loss of $448,000 and, after non-cash charges of $197,000 for payment-in-kind preferred stock dividends, a net loss per common share of $0.13. This compares to a net loss of $771,000 and, after non-cash charges of $159,000 for payment-in-kind preferred stock dividends, a net loss per common share of $0.18 for the same period in 2001. In addition, the first quarter 2002 results include non-operating income of $144,000, which is attributable primarily to proceeds from the prepayment of the note receivable from Environmental Support Solutions, Inc.

Kevin J. Zugibe, chairman and chief executive officer, commented, "Hudson's revenues rose 21% during the quarter as a result of increasing sales of refrigerants. This improvement was due to our successful targeting of customers in certain key regions and industries through a marketing strategy we have been implementing since last year. Revenues from our RefrigerantSide(R) Services were not as robust as we had anticipated due to reduced activity in our marine business. The U.S. Navy ships that constitute a substantial part of the marine opportunity have not been available because of their involvement in the nation's response to the terrorist attacks of September 11. Despite a less favorable revenue mix relative to last year's comparable quarter due to a lower component of revenues from RefrigerantSide(R) Services, we maintained our overall gross margin at 23% through disciplined management of purchasing and supply costs."

Mr. Zugibe continued, "In mid-March, we reorganized Hudson's organizational structure to better align the company's staff and operational responsibilities so that we can achieve enhanced efficiency and increasingly realize the benefits of operating leverage over time. As a result of this reorganization, we trimmed Hudson's workforce by approximately 10%, which will not only result in on-going cost savings, but will also position us well as we seek to achieve our plan to maintain revenue growth without a proportional increase in sales and marketing and general and administrative expenses. These actions reflect our strong commitment to achieving our goal of growing the company profitably."

Mr. Zugibe concluded, "We continue to develop the depth of our capabilities and the breadth of our offerings in our high value-added RefrigerantSide(R) Services business. Our goal is to use Hudson's market-leading engineering and chemistry expertise to replace the antiquated, traditional methods still being used within the industry to maintain and operate large cooling systems. We hired a highly experienced vice president for sales and marketing in February to spearhead our new sales initiatives, and we have realigned our marketing effort to enhance our focus and cross-selling opportunities.

"We are also increasing our emphasis on major end-users and on preventative maintenance offerings such as our innovative Chiller Chemistry(TM) program, which offers a unique way to achieve efficient chiller performance and extend the system's life. By combining the most technologically advanced equipment and refrigerant-side processes with highly skilled and trained professionals, Hudson offers customized solutions to our customers' complex operational problems."

Separately, the company announced that due to, among other things, changes in certain Nasdaq listing requirements, it is in the process of transferring its common stock listing to the Nasdaq SmallCap Market.

About Hudson: Hudson Technologies, Inc., is a leading provider of innovative solutions to recurring problems within the refrigeration industry. Hudson's proprietary RefrigerantSide(R) Services, which are provided through a nationwide network of service depots, increase operating efficiency and energy savings, and remove moisture, oils and other contaminants frequently found in the refrigeration circuits of large comfort cooling and process refrigeration systems. Performed at a customer's site as an integral part of an effective scheduled maintenance program or in response to emergencies, RefrigerantSide(R) Services offer significant savings to customers due to their ability to be completed rapidly and at higher purity levels, and can be utilized while the customer's system continues to operate. In addition, the company sells refrigerants and provides traditional reclamation services to the commercial and industrial air conditioning and refrigeration markets.

Safe Harbor Statement under the Private Securities Litigation Act of 1995: Statements contained herein, which are not historical facts constitute forward-looking statements involve a number of known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Such factors include, but are not limited to, changes in the markets for refrigerants (including unfavorable market conditions adversely affecting the demand for, and the price of refrigerants), regulatory and economic factors, seasonality, competition, litigation, the nature of supplier or customer arrangements which become available to the Company in the future, adverse weather conditions, possible technological obsolescence of existing products and services, possible reduction in the carrying value of long-lived assets, estimates of the useful life of its assets, potential environmental liability, customer concentration and other risks detailed in the Company's other periodic reports filed with the Securities and Exchange Commission. The words "believe", "expect", "anticipate", "may", "plan", "should" and similar expressions identify forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date the statement was made.