UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

 

FORM 8-K

 

 

CURRENT REPORT Pursuant

to Section 13 or 15(d) of the

Securities Exchange Act of 1934

        

Date of report (Date of earliest event reported)

March 16, 2018

 

Hudson Technologies, Inc.

(Exact Name of Registrant as Specified in Charter)

New York

(State or Other Jurisdiction of Incorporation)

 

1-13412		13-3641539
(Commission File Number)		(IRS Employer Identification No.)
PO Box 1541, 1 Blue Hill Plaza, Pearl River, New York		10965
(Address of Principal Executive Offices)		(Zip Code)

 

(845) 735-6000

(Registrant's Telephone Number, Including Area Code)

Not Applicable

(Former Name or Former Address, if Changed Since Last Report)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

 

¨

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

¨

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

¨

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

¨

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

 

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.  ¨

 

 

 

EXPLANATORY NOTE

 

As previously reported, on October 10, 2017, Hudson Technologies, Inc. (the “Company”) and its wholly-owned subsidiary, Hudson Holdings, Inc. (“Holdings”) completed the acquisition (the “Acquisition”) from Airgas, Inc. (“Airgas”) of all of the outstanding stock of Airgas-Refrigerants, Inc., a Delaware corporation (“ARI”). On October 11, 2017, ARI changed its name to Aspen Refrigerants, Inc.

 

The Company filed a Current Report on Form 8-K/A (Amendment No. 1) on November 8, 2017 (the “8-K/A”) with respect to the Acquisition, which contained the required:

 

·

historical financial statements of ARI, in accordance with Rule 3-05 of Regulation S-X

 

·

pro forma financial information of the Company and ARI in accordance with Article 11 of Regulation S-X giving effect to certain pro forma events relating to the Acquisition

 

In accordance with applicable rules, the prior 8-K/A contained information at and for the periods ended June 30, 2017 and comparable prior year and other required periods. On February 14, 2018, the Company filed an additional Current Report on Form 8-K to voluntarily update the aforementioned unaudited financial statements at and for the periods ended September 30, 2017 and comparable prior year. In addition, pro forma financial information was voluntarily updated in such 8-K as of and for the nine months ended September 30, 2017 and the 12 months ended December 31, 2016.

 

This Current Report on Form 8-K is being filed to voluntarily update the Unaudited Pro Forma Condensed Combined Statement of Income for the 12 months ended December 31, 2017. 

 

 

Item 9.01

Financial Statements and Exhibits

 

 

(b)

Pro Forma Financial Information

 

Filed herewith is the following pro forma financial information:

 

Unaudited Pro Forma Condensed Combined Statement of Income for the twelve months ended December 31, 2017 of the Company and ARI

 

(d)

Exhibits

 

99.1

Unaudited Pro Forma Condensed Combined Statement of Income for the twelve months ended December 31, 2017 of the Company and ARI

 

 

 

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 hereunto duly authorized.

 

Date: March 16, 2018

 

	HUDSON TECHNOLOGIES, INC.
	By:	/s/ Stephen P. Mandracchia
	Name:	Stephen P. Mandracchia
	Title:	Vice President Legal & Regulatory Secretary

 

 

 

Exhibit 99.1 

 

Pro forma Condensed Consolidated Financial Statement

 

Hudson Technologies, Inc. and Subsidiaries

 

For the Twelve Months Ended December 31, 2017

 

 

 

 

HUDSON TECHNOLOGIES, INC. AND SUBSIDIARIES

PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

 

On October 10, 2017, Hudson Technologies, Inc. (together with its subsidiaries, “Hudson” or the “Company”) and its wholly-owned subsidiary, Hudson Holdings, Inc. (“Holdings”) completed the acquisition (the “Acquisition”) from Airgas, Inc. (“Airgas”) of all of the outstanding stock of Airgas-Refrigerants, Inc., a Delaware corporation (“ARI”). On October 11, 2017, ARI changed its name to Aspen Refrigerants, Inc.

 

At closing, the Company paid net cash consideration of approximately $209 million, which included preliminary post-closing adjustments relating to: (i) changes in the net working capital of ARI as of the closing relative to a net working capital target, (ii) the actual amount of specified types of R-22 refrigerant inventory on hand at closing relative to a target amount thereof, and (iii) other consideration pursuant to the Stock Purchase Agreement.

 

The cash consideration paid at closing was financed with available cash balances, plus $80 million of borrowings under an enhanced asset based lending facility of $150 million from PNC Bank and a new term loan of $105 million from funds advised by FS Investments and sub-advised by GSO Capital Partners LP.

 

Basis of Pro Forma Presentation

The unaudited pro forma consolidated statement of operations for the 12 months ended December 31, 2017 is based on the historical financial statements of Hudson and ARI, after giving effect to the cash paid and financing used to consummate the acquisition of ARI as well as certain pro forma adjustments assuming the transaction occurred at January 1, 2017.

 

The unaudited pro forma consolidated statement of operations for the 12 months ended December 31, 2017 should be read in conjunction with the historical financial statements and accompanying notes contained in the Hudson Technologies, Inc. Annual Report on Form 10-K filed with the Securities and Exchange Commission (SEC) on March 16, 2018.  The unaudited pro forma consolidated statement of operations for the 12 months ended December 31, 2017 is presented for informational purposes only and is not necessarily indicative of the operating results or the financial position that would have been achieved had the acquisition been consummated as of the date indicated or of the results that may be obtained in the future.

 

Due to the timing of the ARI acquisition, which closed during the fourth quarter of 2017, our estimates of fair values of the assets that we acquired and the liabilities that we assumed are based on information that was available as of the acquisition date of ARI and are preliminary. We are continuing to evaluate the underlying inputs and assumptions used in our valuations, particularly with respect to certain aspects of the acquired inventory and property and equipment. In addition, in accordance with the stock purchase agreement the purchase price remains subject to further working capital adjustment. Accordingly, these preliminary estimates are subject to change during the measurement period, which is the period subsequent to the acquisition date during which the acquiror may adjust the provisional amounts recognized for a business combination, not to exceed one year form the acquisition date.

 

The following table summarizes the fair values of the assets acquired and liabilities assumed from the ARI acquisition:

 

		Amortization life (in months)				Fair value (in thousands)
Accounts receivable						$	14,668
Other assets							734
Inventories							103,876
Property and equipment							24,179
Customer relationships			144				29,660
Above-market leases			153				567
Goodwill							48,609
Total assets acquired						$	222,293
Accounts payable and accrued expenses						$	3,210
Other current liabilities							10,114
Total liabilities assumed						$	13,324
Total purchase price						$	208,969

 

 

Hudson Technologies, Inc. and Subsidiaries  

Unaudited Pro Forma Condensed Consolidated Statement of Operations

12 Months Ended December 31, 2017

 

(Amounts in thousands, except per share amounts)

 

 

		FY 2017												Historical
		Historical Hudson				01/01- 10/10/2017				Carve-Out				Airgas Refrigerants, Inc.				Pro Forma					Pro Forma
		Technologies (1)				Airgas Refrigerants, Inc.(2)				Adjustment (3)				Standalone (4)				Adjustments					Consolidated
Revenues		$	140,380			$	115,321							$	115,321			$	-				$	255,701
Cost of sales			102,396				71,590								71,590				6,079		A			180,065
Gross profit			37,984				43,731				-				43,731				(6,079	)				75,636
Operating expenses:
Selling, general and administrative			21,745				14,241								14,241				(6,399	)	C,D			29,587
Amortization			1,107				76				(76	)			-				1,888		B			2,995
Total Operating expenses			22,852				14,317				(76	)			14,241				(4,511	)				32,582
Operating income (loss)			15,132				29,414				76				29,490				(1,568	)				43,054
Other income (expense):
Interest expense			(3,156	)			(82	)			-				(82	)			(9,458	)	E			(12,696	)
Other income (expense)			28				(2	)			-				(2	)			-					26
Total other income (expense)			(3,128	)			(84	)			-				(84	)			(9,458	)				(12,670	)
Income (loss) before income taxes			12,004				29,330				76				29,406				(11,026	)				30,384
Income tax expense (benefit)			847				10,293				29				10,322				(4,190	)	F			6,979
Net income (loss)		$	11,157			$	19,037			$	47			$	19,084				(6,836	)				23,405
Net income (loss) per common share - Basic		$	0.27																				$	0.56
Net income (loss) per common share - Diluted		$	0.26																				$	0.55
Weighted average number of shares outstanding - Basic			41,764,230																					41,764,230
Weighted average number of shares outstanding - Diluted			42,766,843																					42,766,843

 

  

See accompanying Notes to Unaudited Pro Forma Condensed Consolidated Statement of Operations

 

Notes to Unaudited Pro Forma Condensed Consolidated Statement of Operations

 

(1)

Reflects Hudson's audited Statement of Operations for the 12 months ended December 31, 2017.

(2)

Reflects Aspen Refrigerants, Inc.'s unaudited Statement of Operations amounts for the period January 1, 2017 to October 10, 2017.

(3)

Reflects adjustments to remove expenses related to historical Airgas Refrigerants, Inc. intangibles not acquired.

(4)

Represents the unaudited historical acquired company Statement of Operations for the period January 1, 2017 to October 10, 2017.

 

The following adjustments have been reflected in the unaudited pro forma consolidated statement of income for the twelve months ended December 31, 2017, as though the Acquisition occurred as of the beginning of the period presented herein:

 

A

To record $6.1 million of amortization of the step up in inventory to its estimated fair value for the period from January 1, 2017 to October 10, 2017.

B

To record $1.9 million of amortization expense relating to customer relationships and above -market leases established upon acquisition.

C

To record the depreciation expense adjustment relating to the effect of fair market value adjustment of fixed assets.

D

Represents the elimination of $6.3 million of nonrecurring transaction fees incurred during 2017.

E

To record interest and amortization of deferred financing fees related to the financing of the acquisition.

F

To record the tax effect of the proforma adjustments.

 

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