Document And Entity Information
Document And Entity Information - shares | 9 Months Ended | |
Sep. 30, 2017 | Nov. 07, 2017 | |
Document Information [Line Items] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Sep. 30, 2017 | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | Q3 | |
Entity Registrant Name | HUDSON TECHNOLOGIES INC /NY | |
Entity Central Index Key | 925,528 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Accelerated Filer | |
Trading Symbol | HDSN | |
Entity Common Stock, Shares Outstanding | 42,039,452 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Current assets: | ||
Cash and cash equivalents | $ 43,994 | $ 33,931 |
Trade accounts receivable - net | 13,948 | 4,797 |
Inventories | 63,810 | 68,601 |
Prepaid expenses and other current assets | 6,555 | 847 |
Total current assets | 128,307 | 108,176 |
Property, plant and equipment, less accumulated depreciation | 7,069 | 7,532 |
Deferred tax asset | 1,874 | 2,532 |
Intangible assets, less accumulated amortization | 2,935 | 3,299 |
Goodwill | 856 | 856 |
Other assets | 88 | 75 |
Total Assets | 141,129 | 122,470 |
Current liabilities: | ||
Trade accounts payable | 8,528 | 5,110 |
Accrued expenses and other current liabilities | 2,589 | 2,888 |
Accrued payroll | 824 | 1,782 |
Income taxes payable | 1,115 | 322 |
Short-term debt and current maturities of long-term debt | 97 | 199 |
Total current liabilities | 13,153 | 10,301 |
Long-term debt, less current maturities | 83 | 152 |
Total Liabilities | 13,236 | 10,453 |
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 | 0 | 0 |
Common stock, $0.01 par value; shares authorized 100,000,000; issued and outstanding 42,039,452 and 41,465,820 | 420 | 415 |
Additional paid-in capital | 113,540 | 114,032 |
Retained earnings (accumulated deficit) | 13,933 | (2,430) |
Total Stockholders' Equity | 127,893 | 112,017 |
Total Liabilities and Stockholders' Equity | $ 141,129 | $ 122,470 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Common stock, issued | 42,039,452 | 41,465,820 |
Common stock, outstanding | 42,039,452 | 41,465,820 |
Preferred Stock | ||
Preferred stock, shares authorized | 5,000,000 | 5,000,000 |
Series A Convertible Preferred Stock | ||
Preferred stock, par value | $ 0.01 | $ 0.01 |
Preferred stock, liquidation preference value | $ 100 | $ 100 |
Preferred stock, shares authorized | 150,000 | 150,000 |
Preferred stock, issued | 0 | 0 |
Preferred stock, outstanding | 0 | 0 |
Consolidated Income Statements
Consolidated Income Statements - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Revenues | $ 24,706 | $ 34,930 | $ 115,766 | $ 97,701 |
Cost of sales | 19,636 | 22,890 | 80,811 | 67,649 |
Gross profit | 5,070 | 12,040 | 34,955 | 30,052 |
Operating expenses: | ||||
Selling, general and administrative | 3,473 | 3,895 | 9,823 | 8,507 |
Amortization | 121 | 127 | 364 | 365 |
Total operating expenses | 3,594 | 4,022 | 10,187 | 8,872 |
Operating income | 1,476 | 8,018 | 24,768 | 21,180 |
Interest expense | (24) | (296) | (170) | (919) |
Income before income taxes | 1,452 | 7,722 | 24,598 | 20,261 |
Income tax expense (benefit) | (652) | 2,933 | 8,236 | 7,699 |
Net income | $ 2,104 | $ 4,789 | $ 16,362 | $ 12,562 |
Net income per common share - Basic | $ 0.05 | $ 0.14 | $ 0.39 | $ 0.38 |
Net income per common share - Diluted | $ 0.05 | $ 0.14 | $ 0.38 | $ 0.37 |
Weighted average number of shares outstanding - Basic | 41,869,528 | 33,873,479 | 41,648,439 | 33,265,470 |
Weighted average number of shares outstanding - Diluted | 43,463,982 | 35,297,585 | 43,173,427 | 34,341,930 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Cash flows from operating activities: | ||
Net income | $ 16,362 | $ 12,562 |
Adjustments to reconcile net income to cash provided by operating activities: | ||
Depreciation and amortization | 1,688 | 1,723 |
Allowance for doubtful accounts | 90 | 17 |
Value of share-based payment arrangements | 28 | 601 |
Amortization of deferred finance costs | 33 | 113 |
Deferred tax asset utilization | 658 | 1,584 |
Adjustment to deferred acquisition payable | 0 | 594 |
Changes in assets and liabilities: | ||
Trade accounts receivable | (9,241) | (4,834) |
Inventories | 4,790 | (4,687) |
Prepaid and other assets | (5,754) | 741 |
Income taxes payable | 793 | 1,787 |
Accounts payable and accrued expenses | 2,690 | (2,760) |
Cash provided by operating activities | 12,137 | 7,441 |
Cash flows from investing activities: | ||
Additions to property, plant, and equipment | (861) | (877) |
Cash used in investing activities | (861) | (877) |
Cash flows from financing activities: | ||
Payment of deferred acquisition costs | (528) | (1,038) |
Proceeds from issuance of common stock | 722 | 2,634 |
Tax payment withholdings related to settlements of stock option awards | (1,235) | 0 |
Repayment of short-term debt - net | 0 | (5,205) |
Proceeds from long-term debt - net | 0 | 27 |
Repayment of long-term debt | (172) | (264) |
Cash used in financing activities | (1,213) | (3,846) |
Increase in cash and cash equivalents | 10,063 | 2,718 |
Cash and cash equivalents at beginning of period | 33,931 | 1,258 |
Cash and cash equivalents at end of period | 43,994 | 3,976 |
Supplemental Disclosure of Cash Flow Information: | ||
Cash paid during period for interest | 227 | 806 |
Cash paid for income taxes | $ 6,785 | $ 4,328 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2017 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Hudson Technologies, Inc., incorporated under the laws of New York on January 11, 1991 TM On October 10, 2017, 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”), as more fully described in Note 9. During the third quarter of 2017, the Company changed its presentation of its Consolidated Income Statements to more closely align its results with the acquisition of ARI. Certain balances for the three and nine months ended September 30, 2016, respectively, including $ 0.9 3.0 3.1 5.8 In preparing the accompanying consolidated financial statements, and in accordance with 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, 2016. Operating results for the nine month period ended September 30, 2017 are not necessarily indicative of the results that may be expected for the year ending December 31, 2017. 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. The consolidated financial statements represent all companies of which Hudson directly or indirectly has majority ownership or otherwise controls. Significant intercompany accounts and transactions have been eliminated. The Company's consolidated financial statements include the accounts of wholly-owned subsidiaries Hudson 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. The carrying values of financial instruments including trade accounts receivable and accounts payable approximate fair value at September 30, 2017 and December 31, 2016, because of the relatively short maturity of these instruments. The carrying value of short and long-term debt approximates fair value, due to the variable rate nature of the debt, as of September 30, 2017 and December 31, 2016. Please see Note 2 for further details on fair value description and hierarchy of the Company’s deferred acquisition cost. 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 doubtful accounts based on factors associated with the credit risk of specific accounts, historical trends, and other information. The carrying value of the Company’s accounts receivable is reduced by the established allowance for doubtful accounts. The allowance for doubtful accounts 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. For the nine month period ended September 30, 2017, 37 4.3 For the nine month period ended September 30, 2016, 33 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. Temporary investments with original maturities of ninety days or less are included in cash and cash equivalents. Inventories, consisting primarily of refrigerant products available for sale, are stated at the lower of cost, on a first-in first-out basis, or market. 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 market adjustment, the impact of which would be reflected in cost of sales on the Consolidated Statements of Operations. 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 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 (for financial reporting purposes) using the straight-line method over the useful lives of the respective assets. Leasehold improvements are amortized on a straight-line basis over the shorter of economic life or terms of the respective leases. 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 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. For the year ended December 31, 2016, the Company performed the annual goodwill impairment assessment using a qualitative approach to determine whether it is more likely than not that the fair value of goodwill is less than its carrying value. In performing the qualitative assessment, we identify and consider the significance of relevant key factors, events, and circumstances that affect the fair value of our goodwill. These factors include external factors such as macroeconomic, industry, and market conditions, as well as entity-specific factors, such as our actual and planned financial performance. If the results of the qualitative assessment conclude that it is not more likely than not that the fair value of goodwill exceeds its carrying value, additional quantitative impairment testing is performed. There were no indicators of impairment during the three and nine months ended September 30, 2017. Revenues are recorded upon completion of service or product shipment and passage of title to customers in accordance with contractual terms. The Company evaluates each sale to ensure collectability. In addition, each sale is based on an arrangement with the customer and the sales price to the customer is fixed. In July 2016 the Company was awarded, as prime contractor, a five-year contract, including a five-year renewal option, by the United States Defense Logistics Agency (“DLA”) for the management, supply, and sale of refrigerants, compressed gases, cylinders and related items. Due to the contract containing multiple elements, the Company assessed the arrangement in accordance with Accounting Standards Codification (“ASC”) 605-25, Revenue Recognition: Multiple-Element Arrangements 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. 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 utilizes the asset and liability method for recording deferred income taxes, which provides for the establishment of deferred tax asset or liability accounts based on the difference between tax and financial reporting bases of certain assets and liabilities. The tax benefit associated with the Company's net operating loss carry forwards (“NOLs”) is recognized to the extent that the Company is expected to recognize future taxable income. The Company assesses the recoverability of its deferred tax assets based on its expectation that it will recognize future taxable income and adjusts its valuation allowance accordingly. As of September 30, 2017, and December 31, 2016, the net deferred tax asset was $ 1.9 2.5 Certain states either do not allow or limit NOLs and as such the Company will be liable for certain state taxes. To the extent that the Company utilizes its NOLs, it will not pay tax on such income but may be subject to the federal alternative minimum tax. In addition, to the extent that the Company’s net income, if any, exceeds the annual NOL limitation it will pay income taxes based on existing statutory rates. Moreover, as a result of a “change in control”, as defined by the Internal Revenue Service, the Company’s ability to utilize its existing NOLs is subject to certain annual limitations. All the Company’s remaining NOLs of approximately $4.1 million are subject to annual limitations of $1.3 million As a result of an Internal Revenue Service audit, the 2013 and prior federal tax years have been closed. The Company operates in many states throughout the United States and, as of September 30, 2017, the various states’ statutes of limitations remain open for tax years subsequent to 2009. The Company recognizes interest and penalties, if any, relating to income taxes as a component of the provision for income taxes. 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 September 30, 2017, and December 31, 2016, the Company had no uncertain tax positions. If dilutive, common equivalent shares (common shares assuming exercise of options and warrants) utilizing the treasury stock method are considered in the presentation of diluted earnings per share. Three Months Nine Months ended September 30, ended September 30, 2017 2016 2017 2016 Net income $ 2,104 $ 4,789 $ 16,362 $ 12,562 Weighted average number of shares - basic 41,869,528 33,873,479 41,648,439 33,265,470 Shares underlying options 1,594,454 1,424,106 1,524,988 1,076,460 Weighted average number of shares outstanding diluted 43,463,982 35,297,585 43,173,427 34,341,930 During the three month periods ended September 30, 2017 and 2016, certain options and warrants aggregating none and 73,034 During the nine month periods ended September 30, 2017 and 2016, certain options and warrants aggregating none and 123,034 The preparation of financial statements in conformity with generally accepted accounting principles in the United States requires management to make estimates and assumptions that affect reported amounts of certain assets and liabilities, the disclosure of contingent assets and liabilities, and the results of operations during the reporting period. Actual results could differ from these estimates. The Company 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 doubtful accounts, inventory reserves, and valuation allowance for the deferred tax assets relating to its NOLs and commitments and contingencies. With respect to accounts receivable, the Company estimates the necessary allowance for doubtful accounts 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. In determining the Company’s valuation allowance for its deferred tax assets, the Company assesses its ability to generate taxable income in the future. 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 hydrochlorofluorocarbon (“HCFC”) and hydrofluorocarbon (“HFC”) refrigerants and reclaimable, primarily HCFC, HFC and chlorofluorocarbon (“CFC”), refrigerants from suppliers and its customers. Effective January 1, 1996, the Clean Air Act (the “Act”) prohibited the production of virgin CFC refrigerants and limited the production of virgin HCFC refrigerants. Effective January 2004, the Act further limited the production of virgin HCFC refrigerants and federal regulations were enacted which established production and consumption allowances for HCFC refrigerants which imposed limitations on the importation of certain virgin HCFC refrigerants. Under the Act, production of certain virgin HCFC refrigerants is scheduled to be phased out during the period 2010 through 2020, and production of all virgin HCFC refrigerants is scheduled to be phased out by 2030. In October 2014, the EPA published a final rule providing further reductions in the production and consumption allowances for virgin HCFC refrigerants for the years 2015 through 2019 (the “Final Rule”). In the Final Rule, the EPA has established a linear draw down for the production or importation of virgin HCFC-22 that started at approximately 85 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. 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. The Company noted no impairment indicators during the three and nine months ended September 30, 2017. In January 2017, the FASB issued Accounting Standards Update ("ASU") No. 2017-04, “Intangibles-Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment” (ASU 2017-04) which simplifies the accounting for goodwill impairment by eliminating Step 2 of the current goodwill impairment test which requires a hypothetical purchase price allocation to measure goodwill impairment. Under the new standard, a company will record an impairment charge based on the excess of a reporting unit’s carrying amount over its fair value. ASU 2017-04 does not change the guidance on completing Step 1 of the goodwill impairment test and still allows a company to perform the optional qualitative goodwill impairment assessment before determining whether to proceed to Step 1. The standard is effective for annual and interim goodwill impairment tests in fiscal years beginning after December 15, 2019 with early adoption permitted for any impairment test performed on testing dates after January 1, 2017. The Company adopted this standard on January 1, 2017 and will apply its guidance on future impairment assessments. In August 2016, the FASB issued ASU No. 2016-15, "Classification of Certain Cash Receipts and Cash Payments." This ASU addresses eight specific cash flow issues with the objective of eliminating the existing diversity in practice. The amendments in this ASU are effective for public business entities for fiscal years beginning after December 15, 2017, and for interim periods therein, with early adoption permitted. We elected to early adopt ASU 2016-15 as of December 31, 2016, and the adoption did not have a material impact on the presentation of the statement of cash flows. In June 2016, the FASB issued ASU No. 2016-13, "Financial Instruments - Credit Losses." This ASU requires an organization to measure all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. Financial institutions and other organizations will now use forward-looking information to better inform their credit loss estimates. The amendments in this ASU are effective for fiscal years beginning after December 15, 2019, and for interim periods therein. The Company does not expect the amended standard to have a material impact on the Company’s results of operations. In March 2016, the FASB issued ASU No. 2016-09, “Improvements to Employee Share-Based Payment Accounting.” Excess tax benefits and deficiencies will be recognized in the consolidated statement of earnings rather than capital in excess of par value of stock on a prospective basis. A policy election will be available to account for forfeitures as they occur, with the cumulative effect of the change recognized as an adjustment to retained earnings at the date of adoption. Excess tax benefits within the consolidated statement of cash flows will be presented as an operating activity (prospective or retrospective application) and cash payments to tax authorities in connection with shares withheld for statutory tax withholding requirements will be presented as a financing activity (retrospective application). The guidance is effective beginning in 2017. Adoption of ASU No. 2016-09 did not have a material impact on the Company’s consolidated financial statements. In February 2016, the FASB issued ASU 2016-02, "Leases (Topic 842)." The new standard establishes a right-of-use ("ROU") model that requires a lessee to record a ROU asset and a lease liability on the balance sheet for all leases with terms longer than 12 months. Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition in the statement of operations. This ASU is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years and early adoption is permitted. A modified retrospective transition approach is required for capital and operating leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements, with certain practical expedients available. At a minimum, adoption of ASU 2016-02 will require recording a ROU asset and a lease liability on the Company's consolidated balance sheet; however, the Company is still currently evaluating the impact on its consolidated financial statements. In November 2015, the FASB issued ASU 2015-17, “Income Taxes (Topic 740) - Balance Sheet Classification of Deferred Taxes”. ASU 2015-17 requires that deferred tax liabilities and assets be classified as noncurrent in a classified statement of financial position. The amendments in ASU 2015-17 apply to all entities that present a classified statement of financial position. The current requirement that deferred tax liabilities and assets of a tax-paying component of an entity be offset and presented as a single amount is not affected. For public business entities, the amendments in ASU 2015-17 are effective for financial statements issued for annual periods beginning after December 15, 2016, and interim periods within those annual periods. The Company elected to early adopt ASU 2015-17 prospectively in the fourth quarter of 2016. As a result, all deferred tax assets and liabilities have been presented as noncurrent on the consolidated balance sheet as of December 31, 2016. There was no impact on its results of operations as a result of the adoption of ASU 2015-17. In September 2015, the FASB issued Accounting Standards Update No. 2015-16, “Business Combinations (Topic 805): Simplifying the Accounting for Measurement-Period Adjustments”, or ASU 2015-16. This amendment requires the acquirer in a business combination to recognize in the reporting period in which adjustment amounts are determined, any adjustments to provisional amounts that are identified during the measurement period, calculated as if the accounting had been completed at the acquisition date. Prior to the issuance of ASU 2015-16, an acquirer was required to restate prior period financial statements as of the acquisition date for adjustments to provisional amounts. The amendments in ASU 2015-16 are to be applied prospectively upon adoption. The Company adopted ASU 2015-16 in the fourth quarter of 2016. The adoption of the provisions of ASU 2015-16 did not have a material impact on its results of operations or financial position. In May 2014, the FASB issued Accounting Standards Update ("ASU") 2014-09, "Revenue from Contracts with Customers (Topic 606)." The new revenue recognition standard provides a five-step analysis to determine when and how revenue is recognized. The standard requires that a company recognizes revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which a company expects to be entitled in exchange for those goods or services. This ASU is effective for annual periods beginning after December 15, 2017 and will be applied retrospectively to each period presented or as a cumulative-effect adjustment as of the date of adoption. The Company expects to apply the modified retrospective method. As described further in Note 9, the Company acquired ARI in October 2017, and accordingly, the Company is in the process of assessing the revenue practices of the acquired business. Based on the evaluation performed to date, and excluding ARI, the Company does not expect the impact relating to the adoption of this standard to be material to the financial statements. It will result in expanded disclosure, including, related to the Company’s revenue streams, identification of performance obligations and significant judgments made to apply the new standard. However, the Company has not finalized its assessment at this time. |
Fair Value
Fair Value | 9 Months Ended |
Sep. 30, 2017 | |
Fair Value Disclosures [Abstract] | |
Fair Value | 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 an input to the fair value measurement in its entirety requires judgment, and considers factors specific to the asset or liability. The valuation methodologies used for the Company's financial instruments measured on a recurring basis at fair value, including the general classification of such instruments pursuant to the valuation hierarchy, is set forth in the tables below. Total Deferred Acquisition Cost (in thousands, unaudited) Payable (1) Balance at December 31, 2016 $ 789 Payments (789) Balance at September 30, 2017 - (1) Represents deferred acquisition costs related to the acquisition of a supplier of refrigerants and compressed gases in January 2015. See Note 8 for further details. (in thousands) As of December 31, 2016 Fair Value Measurements Carrying Amount Fair Value Level 1 Level 2 Level 3 Liabilities: Deferred acquisition cost $ 789 $ 789 - - $ 789 |
Inventories
Inventories | 9 Months Ended |
Sep. 30, 2017 | |
Inventory Disclosure [Abstract] | |
Inventories | Note 3 - Inventories September 30, 2017 December 31, 2016 (in thousands) (Unaudited) (Audited) Refrigerant and cylinders $ 16,491 $ 11,168 Packaged refrigerants 47,319 57,433 Total $ 63,810 $ 68,601 |
Property, plant and equipment
Property, plant and equipment | 9 Months Ended |
Sep. 30, 2017 | |
Property, Plant and Equipment [Abstract] | |
Property, plant and equipment | Note 4 - Property, plant and equipment September 30, 2017 December 31, 2016 Estimated Lives (Unaudited) (Audited) (in thousands) Property, plant and equipment - Land $ 535 $ 535 - Buildings 830 830 39 years - Building improvements 873 873 39 years - Equipment 15,473 13,423 3-7years - Equipment under capital lease 180 248 5-7 years - Vehicles 1,337 1,360 5 years - Lab and computer equipment, software 2,778 2,652 3-5 years - Furniture & fixtures 288 289 7-8 years - Leasehold improvements 119 119 3 years - Equipment under construction 371 1,654 Subtotal 22,784 21,983 Accumulated depreciation 15,715 14,451 Total $ 7,069 $ 7,532 Depreciation expense for the nine months ended September 30, 2017 and 2016 was $ 1.3 1.3 |
Goodwill and intangible assets
Goodwill and intangible assets | 9 Months Ended |
Sep. 30, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and intangible assets | Note 5 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. The Company performed the annual goodwill impairment assessment using a qualitative approach to determine whether it is more likely than not that the fair value of goodwill is less than its carrying value. In performing the qualitative assessment, we identify and consider the significance of relevant key factors, events, and circumstances that affect the fair value of our goodwill. These factors include external factors such as macroeconomic, industry, and market conditions, as well as entity-specific factors, such as our actual and planned financial performance. If the results of the qualitative assessment conclude that it is not more likely than not that the fair value of goodwill exceeds its carrying value, additional quantitative impairment testing is performed. The impairment test was performed at the operating segment level as the acquired businesses have been fully integrated into our existing structure. Based on the results of the impairment assessment performed, we concluded that it is more likely than not that the fair value of our goodwill significantly exceeds the carrying value. September 30, 2017 (Unaudited) December 31, 2016 (Audited) (in thousands) Amortization Gross Gross Period Carrying Accumulated Carrying Accumulated (in years) Amount Amortization Net Amount Amortization Net Intangible Assets with determinable lives Patents 5 $ 386 $ 372 $ 14 $ 386 $ 366 $ 20 Covenant Not to Compete 6 10 1,270 437 833 1,270 322 948 Customer Relationships 3 10 2,000 620 1,380 2,000 452 1,548 Trade Name 2 30 30 - 30 30 - Licenses 10 1,000 292 708 1,000 217 783 Totals identifiable intangible assets $ 4,686 $ 1,751 $ 2,935 $ 4,686 $ 1,387 $ 3,299 Amortization expense for the nine months ended September 30, 2017 and 2016 was $ 0.4 0.4 |
Share-based compensation
Share-based compensation | 9 Months Ended |
Sep. 30, 2017 | |
Share-Based Compensation [Abstract] | |
Share-Based compensation | Note 6 - 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 nine month periods ended September 30, 2017 and 2016, the share-based compensation expense of $ 28,000 601,000 Share-based awards have historically been made as stock options, and recently during the third quarter of 2015 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 September 30, 2017, the Plans authorized the issuance of 6,000,000 3,251,340 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. Effective September 10, 2004, the Company adopted its 2004 Stock Incentive Plan (“2004 Plan”) pursuant to which 2,500,000 Effective August 27, 2008, the Company adopted its 2008 Stock Incentive Plan (“2008 Plan”) pursuant to which 3,000,000 August 27, 2018 ISOs granted under the 2008 Plan may not be granted at a price less than the fair market value of the common stock on the date of grant (or 110 Effective September 17, 2014, the Company adopted its 2014 Stock Incentive Plan (“2014 Plan”) pursuant to which 3,000,000 September 17, 2024 ISOs granted under the 2014 Plan may not be granted at a price less than the fair market value of the common stock on the date of grant (or 110 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 is incorporating the simplified method to compute expected lives of share-based awards. There were no grants during the nine month periods ended September 30, 2017 and 1,170,534 Weighted Average Stock Option Plan Totals Shares Exercise Price Outstanding at December 31, 2015 2,633,589 $ 2.06 -Exercised (589,725) $ 2.43 -Granted 1,170,534 $ 3.95 Outstanding at December 31, 2016 3,214,398 $ 2.68 -Exercised (984,861) $ 3.07 Outstanding at September 30, 2017, (unaudited) 2,229,537 $ 2.50 During the nine months ended September 30, 2017, there were 984,861 414,229 1.2 Weighted Average Remaining Weighted Average Number of Options Contractual Life Exercise Price Options outstanding and vested 2,229,537 1.7 years $ 2.50 The intrinsic values of options outstanding at September 30, 2017 and December 31, 2016 are $ 11.8 17.1 The intrinsic value of options exercised during the nine months ended September 30, 2017 and 2016 were $ 5.2 1.5 |
Debt
Debt | 9 Months Ended |
Sep. 30, 2017 | |
Debt Disclosure [Abstract] | |
Debt | Note 7 - Debt Please refer to Note 9 for a description of the new credit facilities arising from the acquisition of ARI. Bank Credit Line On June 22, 2012, a subsidiary of Hudson entered into a Revolving Credit, Term Loan and Security Agreement with PNC Bank, National Association, as agent (“Agent” or “PNC”), and such other lenders as may thereafter become a party to the PNC Facility. The Maximum Loan Amount (as defined in the PNC Facility) at September 30, 2017 was $ 50,000,000 46,000,000 50 130,000 Under the terms of the original PNC Facility, as amended by the First Amendment to the PNC Facility, dated February 15, 2013, Hudson could initially borrow up to a maximum of $ 40,000,000 4,000,000 36,000,000 Interest on loans under the PNC Facility was payable in arrears on the first day of each month with respect to loans bearing interest at the domestic rate (as set forth in the PNC Facility) and at the end of each interest period with respect to loans bearing interest at the Eurodollar Rate (as defined in the PNC Facility) or, for Eurodollar Rate Loans (as defined in the PNC Facility) with an interest period in excess of three months, at the earlier of (a) each three months from the commencement of such Eurodollar Rate Loan or (b) the end of the interest period. Interest charges with respect to loans were computed on the actual principal amount of loans outstanding during the month at a rate per annum equal to (A) with respect to Domestic Rate Loans (as defined in the PNC Facility), the sum of the Alternate Base Rate (as defined in the PNC Facility) plus one half of one percent (.50%) Hudson granted to PNC, for itself, and as agent for such other lenders as may thereafter become a lender under the PNC Facility, a security interest in Hudson’s receivables, intellectual property, general intangibles, inventory and certain other assets. The PNC Facility contained certain financial and non-financial covenants relating to Hudson, including limitations on Hudson’s ability to pay dividends on common stock or preferred stock, and also included 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 PNC Facility contained a financial covenant to maintain at all times a Fixed Charge Coverage Ratio of not less than 1.10 1.00 On July 1, 2015, the Company entered into an amendment to the PNC Facility (the “2015 PNC Amendment”). The 2015 PNC Amendment redefined the “Revolving Interest Rate” as well as the “Term Loan Rate” (as defined in the PNC Facility) as follows: “ Revolving Interest Rate” shall mean an interest rate per annum equal to (a) the sum of the Alternate Base Rate (as defined in the PNC Facility) plus one half of one percent (.50%) with respect to Domestic Rate Loans and (b) the sum of the Eurodollar Rate plus two and one quarter of one percent (2.25%) with respect to the Eurodollar Rate Loans. “Term Loan Rate” shall mean an interest rate per annum equal to (a) the sum of the Alternate Base Rate plus one half of one percent (.50%) Eurodollar Rate plus two and one quarter of one percent (2.25%) On April 8, 2016, the Company entered into an amendment to the PNC Facility (the “2016 PNC Amendment”). Pursuant to the 2016 PNC Amendment, the Maximum Loan Amount (as defined in the PNC Facility) increased from $ 40,000,000 50,000,000 36,000,000 46,000,000 June 30, 2020 The Company was in compliance with all covenants, under the PNC Facility as of September 30, 2017. 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. Although we expect to remain in compliance with all covenants in the PNC Facility, as amended, depending on our future operating performance and general economic conditions, we cannot make any assurance that we will continue to be in compliance. |
Acquisitions
Acquisitions | 9 Months Ended |
Sep. 30, 2017 | |
Business Combinations [Abstract] | |
Acquisitions | Note 8 - Acquisitions See Note 9 regarding the closing of the acquisition of ARI. On January 16, 2015, the Company acquired certain assets of a supplier of refrigerants and compressed gases, and also hired three employees associated with the business. The purchase price for this acquisition was $2.4 million cash paid at closing and the assumption of a liability of $20,000, and a maximum of an additional $3.0 million earn-out. 1.6 1.6 2.3 As of December 31, 2015, the valuation and allocation of the purchase price for this acquisition was finalized. As part of that process it was determined that the deferred acquisition cost payable that had been previously recorded at the maximum earn out of $ 3.0 1.0 5.4 4.4 1.9 0.8 0.1 The intangible assets are being amortized over a period ranging from two to ten years. The goodwill recognized as part of the acquisition will be deductible for tax purposes. The transaction also provides for additional employee compensation for years 2017 through 2019, based on certain revenue performance. The total additional employee compensation, if any, cannot exceed $ 3,000,000 The results of the acquired business operations are included in the Company’s Consolidated Statements of Operations from the date of acquisition, and are not material to the Company’s financial position or results of operations. |
Subsequent Event
Subsequent Event | 9 Months Ended |
Sep. 30, 2017 | |
Subsequent Events [Abstract] | |
Subsequent Event | Note 9 Subsequent Event On October 10, 2017, 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”). At closing, Holdings paid net cash consideration to Airgas of approximately $ 209 The cash consideration paid by Holdings at closing was financed with available cash balances, plus $ 80 150 105 The following table provides unaudited pro forma total revenues and results of operations for the nine months ended September 30, 2017 and 2016 as if Hudson and ARI had been acquired on January 1, 2016. The unaudited pro forma results reflect certain adjustments related to the acquisitions, such as a step-up in basis in inventory, amortization expense on intangible assets arising from the acquisition, and interest on the new loan. The pro forma results do not include any anticipated cost synergies or other effects of any planned integration. Nine Months Ended September 30, (unaudited, in thousands) 2017 2016 Revenues $ 228,148 $ 205,228 Net income $ 26,317 $ 15,317 Net income per share Basic $ 0.63 $ 0.46 Diluted $ 0.61 $ 0.45 The unaudited pro forma earnings for the nine months ended September 30, 2017 were also adjusted to exclude $ 2.4 Amendment and Restatement of Revolving Credit Facility On October 10, 2017, Hudson Technologies Company (“HTC”), an indirect subsidiary of the Company, and HTC’s affiliates Hudson Holdings, Inc. and Airgas-Refrigerants, Inc., as borrowers (collectively, the “Borrowers”), and the Company as a guarantor, became obligated under an Amended and Restated Revolving Credit and Security Agreement (the “PNC Facility”) with PNC Bank, National Association, as administrative agent, collateral agent and lender (“Agent” or “PNC”), PNC Capital Markets LLC as lead arranger and sole bookrunner, and such other lenders as may thereafter become a party to the PNC Facility. The PNC Facility amended and restated HTC’s existing credit facility with PNC. Under the terms of the PNC Facility, the Borrowers may borrow, from time to time, up to $150 million at any time consisting of revolving loans in a maximum amount up to the lesser of $150 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 PNC Facility. The PNC Facility also contains a sublimit of $ 15 5 Amounts borrowed under the PNC Facility were used by the Borrowers to consummate the acquisition of Airgas-Refrigerants, Inc. (“ARI”) and for working capital needs, certain permitted future acquisitions, and to reimburse drawings under letters of credit. At October 10, 2017, total borrowings under the PNC Facility were $ 80 Interest on loans under the PNC Facility is payable in arrears on the first day of each month with respect to loans bearing interest at the domestic rate (as set forth in the PNC Facility) and at the end of each interest period with respect to loans bearing interest at the Eurodollar rate (as set forth in the PNC Facility) or, for Eurodollar rate loans with an interest period in excess of three months, at the earlier of (a) each three months from the commencement of such Eurodollar rate loan or (b) the end of the interest period. Interest charges with respect to loans are computed on the actual principal amount of loans outstanding during the month at a rate per annum equal to (A) with respect to domestic rate loans, the sum of (i) a rate per annum equal to the higher of (1) the base commercial lending rate of PNC, (2) the federal funds open rate plus 0.5% and (3) the daily LIBOR plus 1.0%, plus (ii) between 0.50% and 1.00% depending on average quarterly undrawn availability and (B) with respect to Eurodollar rate loans, the sum of the Eurodollar rate plus between 1.50% and 2.00% depending on average quarterly undrawn availability. Borrowers granted to the Agent, for the benefit of the lenders, a security interest in substantially all of Borrowers’ assets, including receivables, equipment, general intangibles (including intellectual property), inventory, subsidiary stock, real property, and certain other assets. The PNC Facility contains a fixed charge coverage ratio covenant. The PNC 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 commitments under the PNC 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 October 10, 2022, unless the commitments are terminated and the outstanding principal amount of the loans are accelerated sooner following an event of default. In connection with the closing of the PNC Facility, the Company also entered into an Amended and Restated Guaranty and Suretyship Agreement, dated as of October 10, 2017 (the “Revolver Guarantee”), pursuant to which the Company affirmed its unconditional guarantee of the payment and performance of all obligations owing by Borrowers to PNC, as Agent for the benefit of the revolving lenders. New Term Loan Facility On October 10, 2017, HTC, and the Company, as guarantor, became obligated under a Term Loan Credit and Security Agreement (the “Term Loan Facility”) with U.S. Bank National Association, as administrative agent and collateral agent (“Term Loan Agent”) and funds advised by FS Investments and sub-advised by GSO Capital Partners LP and such other lenders as may thereafter become a party to the Term Loan Facility (the “Term Loan Lenders”). Under the terms of the Term Loan Facility, the Borrowers have immediately borrowed $ 105 25 The Term Loans mature on October 10, 2023 Principal payments on the Term Loans are required on a quarterly basis, commencing with the quarter ending March 31, 2018, in the amount of 1% of the original principal amount of the outstanding Term Loans per annum. The Term Loan Facility also requires annual payments of up to 50% of Excess Cash Flow (as defined in the Term Loan Facility) depending upon the Company’s Total Leverage Ratio (as defined in the Term Loan Facility) for the applicable year. The Term Loan Facility also requires mandatory prepayments of the Term Loans in the event of certain asset dispositions, debt issuances, and casualty and condemnation events. The Term Loans may be prepaid at the option of the Borrowers at par in an amount up to $30 million. Additional prepayments are permitted after the first anniversary of the closing date subject to a prepayment premium of 3% in year two, 1% in year three and zero in year four and thereafter. Interest on the Term Loans is generally payable on the earlier of the last day of the interest period applicable to such Eurodollar rate loan and the last day of the Term Loan Facility, as applicable. Interest is payable at the rate per annum of LIBOR plus 7.25 3.00 Borrowers and the Company granted to the Term Loan Agent, for the benefit of the Term Loan 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 Term Loan Facility contains a total leverage ratio covenant, tested quarterly. The Term Loan Facility also contains customary non-financial covenants relating to the Company and the Borrowers, including limitations on their 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. In connection with the closing of the Term Loan Facility, the Company also entered into a Guaranty and Suretyship Agreement, dated as of October 10, 2017 (the “Term Loan Guarantee”), pursuant to which the Company affirmed its unconditional guarantee of the payment and performance of all obligations owing by Borrowers to Term Loan Agent, as agent for the benefit of the Term Loan Lenders. The Term Loan Agent and the Agent have entered into an intercreditor agreement governing the relative priority of their security interests granted by the Borrowers and the Guarantor in the collateral, providing that the Agent shall have a first priority security interest in the accounts receivable, inventory, deposit accounts and certain other assets (the “Revolving Credit Priority Collateral”) and the Term Loan Agent shall have a first priority security interest in the equipment, real property, capital stock of subsidiaries and certain other assets (the “Term Loan Priority Collateral”). |
Summary of Significant Accoun15
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2017 | |
Accounting Policies [Abstract] | |
Business | Business Hudson Technologies, Inc., incorporated under the laws of New York on January 11, 1991 TM On October 10, 2017, 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”), as more fully described in Note 9. During the third quarter of 2017, the Company changed its presentation of its Consolidated Income Statements to more closely align its results with the acquisition of ARI. Certain balances for the three and nine months ended September 30, 2016, respectively, including $ 0.9 3.0 3.1 5.8 In preparing the accompanying consolidated financial statements, and in accordance with 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, 2016. Operating results for the nine month period ended September 30, 2017 are not necessarily indicative of the results that may be expected for the year ending December 31, 2017. In the opinion of management, all estimates and adjustments considered necessary for a fair presentation have been included and all such adjustments were normal and recurring. |
Consolidation | Consolidation The consolidated financial statements represent all companies of which Hudson directly or indirectly has majority ownership or otherwise controls. Significant intercompany accounts and transactions have been eliminated. The Company's consolidated financial statements include the accounts of wholly-owned subsidiaries Hudson 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 | Fair Value of Financial Instruments The carrying values of financial instruments including trade accounts receivable and accounts payable approximate fair value at September 30, 2017 and December 31, 2016, because of the relatively short maturity of these instruments. The carrying value of short and long-term debt approximates fair value, due to the variable rate nature of the debt, as of September 30, 2017 and December 31, 2016. Please see Note 2 for further details on fair value description and hierarchy of the Company’s deferred acquisition cost. |
Credit Risk | 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 doubtful accounts based on factors associated with the credit risk of specific accounts, historical trends, and other information. The carrying value of the Company’s accounts receivable is reduced by the established allowance for doubtful accounts. The allowance for doubtful accounts 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. For the nine month period ended September 30, 2017, 37 4.3 For the nine month period ended September 30, 2016, 33 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 | Cash and Cash Equivalents Temporary investments with original maturities of ninety days or less are included in cash and cash equivalents. |
Inventories | 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 market. 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 market adjustment, the impact of which would be reflected in cost of sales on the Consolidated Statements of Operations. 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 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 (for financial reporting purposes) using the straight-line method over the useful lives of the respective assets. Leasehold improvements are amortized on a straight-line basis over the shorter of economic life or terms of the respective leases. 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 | Goodwill 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. For the year ended December 31, 2016, the Company performed the annual goodwill impairment assessment using a qualitative approach to determine whether it is more likely than not that the fair value of goodwill is less than its carrying value. In performing the qualitative assessment, we identify and consider the significance of relevant key factors, events, and circumstances that affect the fair value of our goodwill. These factors include external factors such as macroeconomic, industry, and market conditions, as well as entity-specific factors, such as our actual and planned financial performance. If the results of the qualitative assessment conclude that it is not more likely than not that the fair value of goodwill exceeds its carrying value, additional quantitative impairment testing is performed. There were no indicators of impairment during the three and nine months ended September 30, 2017. |
Revenues and Cost of Sales | Revenues and Cost of Sales Revenues are recorded upon completion of service or product shipment and passage of title to customers in accordance with contractual terms. The Company evaluates each sale to ensure collectability. In addition, each sale is based on an arrangement with the customer and the sales price to the customer is fixed. In July 2016 the Company was awarded, as prime contractor, a five-year contract, including a five-year renewal option, by the United States Defense Logistics Agency (“DLA”) for the management, supply, and sale of refrigerants, compressed gases, cylinders and related items. Due to the contract containing multiple elements, the Company assessed the arrangement in accordance with Accounting Standards Codification (“ASC”) 605-25, Revenue Recognition: Multiple-Element Arrangements 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. 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. |
Income Taxes | Income Taxes The Company utilizes the asset and liability method for recording deferred income taxes, which provides for the establishment of deferred tax asset or liability accounts based on the difference between tax and financial reporting bases of certain assets and liabilities. The tax benefit associated with the Company's net operating loss carry forwards (“NOLs”) is recognized to the extent that the Company is expected to recognize future taxable income. The Company assesses the recoverability of its deferred tax assets based on its expectation that it will recognize future taxable income and adjusts its valuation allowance accordingly. As of September 30, 2017, and December 31, 2016, the net deferred tax asset was $ 1.9 2.5 Certain states either do not allow or limit NOLs and as such the Company will be liable for certain state taxes. To the extent that the Company utilizes its NOLs, it will not pay tax on such income but may be subject to the federal alternative minimum tax. In addition, to the extent that the Company’s net income, if any, exceeds the annual NOL limitation it will pay income taxes based on existing statutory rates. Moreover, as a result of a “change in control”, as defined by the Internal Revenue Service, the Company’s ability to utilize its existing NOLs is subject to certain annual limitations. All the Company’s remaining NOLs of approximately $4.1 million are subject to annual limitations of $1.3 million As a result of an Internal Revenue Service audit, the 2013 and prior federal tax years have been closed. The Company operates in many states throughout the United States and, as of September 30, 2017, the various states’ statutes of limitations remain open for tax years subsequent to 2009. The Company recognizes interest and penalties, if any, relating to income taxes as a component of the provision for income taxes. 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 September 30, 2017, and December 31, 2016, the Company had no uncertain tax positions. |
Income per Common and Equivalent Shares | Income per Common and Equivalent Shares If dilutive, common equivalent shares (common shares assuming exercise of options and warrants) utilizing the treasury stock method are considered in the presentation of diluted earnings per share. Three Months Nine Months ended September 30, ended September 30, 2017 2016 2017 2016 Net income $ 2,104 $ 4,789 $ 16,362 $ 12,562 Weighted average number of shares - basic 41,869,528 33,873,479 41,648,439 33,265,470 Shares underlying options 1,594,454 1,424,106 1,524,988 1,076,460 Weighted average number of shares outstanding diluted 43,463,982 35,297,585 43,173,427 34,341,930 During the three month periods ended September 30, 2017 and 2016, certain options and warrants aggregating none and 73,034 During the nine month periods ended September 30, 2017 and 2016, certain options and warrants aggregating none and 123,034 |
Estimates and Risks | Estimates and Risks The preparation of financial statements in conformity with generally accepted accounting principles in the United States requires management to make estimates and assumptions that affect reported amounts of certain assets and liabilities, the disclosure of contingent assets and liabilities, and the results of operations during the reporting period. Actual results could differ from these estimates. The Company 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 doubtful accounts, inventory reserves, and valuation allowance for the deferred tax assets relating to its NOLs and commitments and contingencies. With respect to accounts receivable, the Company estimates the necessary allowance for doubtful accounts 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. In determining the Company’s valuation allowance for its deferred tax assets, the Company assesses its ability to generate taxable income in the future. 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 hydrochlorofluorocarbon (“HCFC”) and hydrofluorocarbon (“HFC”) refrigerants and reclaimable, primarily HCFC, HFC and chlorofluorocarbon (“CFC”), refrigerants from suppliers and its customers. Effective January 1, 1996, the Clean Air Act (the “Act”) prohibited the production of virgin CFC refrigerants and limited the production of virgin HCFC refrigerants. Effective January 2004, the Act further limited the production of virgin HCFC refrigerants and federal regulations were enacted which established production and consumption allowances for HCFC refrigerants which imposed limitations on the importation of certain virgin HCFC refrigerants. Under the Act, production of certain virgin HCFC refrigerants is scheduled to be phased out during the period 2010 through 2020, and production of all virgin HCFC refrigerants is scheduled to be phased out by 2030. In October 2014, the EPA published a final rule providing further reductions in the production and consumption allowances for virgin HCFC refrigerants for the years 2015 through 2019 (the “Final Rule”). In the Final Rule, the EPA has established a linear draw down for the production or importation of virgin HCFC-22 that started at approximately 85 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 | 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. The Company noted no impairment indicators during the three and nine months ended September 30, 2017. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In January 2017, the FASB issued Accounting Standards Update ("ASU") No. 2017-04, “Intangibles-Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment” (ASU 2017-04) which simplifies the accounting for goodwill impairment by eliminating Step 2 of the current goodwill impairment test which requires a hypothetical purchase price allocation to measure goodwill impairment. Under the new standard, a company will record an impairment charge based on the excess of a reporting unit’s carrying amount over its fair value. ASU 2017-04 does not change the guidance on completing Step 1 of the goodwill impairment test and still allows a company to perform the optional qualitative goodwill impairment assessment before determining whether to proceed to Step 1. The standard is effective for annual and interim goodwill impairment tests in fiscal years beginning after December 15, 2019 with early adoption permitted for any impairment test performed on testing dates after January 1, 2017. The Company adopted this standard on January 1, 2017 and will apply its guidance on future impairment assessments. In August 2016, the FASB issued ASU No. 2016-15, "Classification of Certain Cash Receipts and Cash Payments." This ASU addresses eight specific cash flow issues with the objective of eliminating the existing diversity in practice. The amendments in this ASU are effective for public business entities for fiscal years beginning after December 15, 2017, and for interim periods therein, with early adoption permitted. We elected to early adopt ASU 2016-15 as of December 31, 2016, and the adoption did not have a material impact on the presentation of the statement of cash flows. In June 2016, the FASB issued ASU No. 2016-13, "Financial Instruments - Credit Losses." This ASU requires an organization to measure all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. Financial institutions and other organizations will now use forward-looking information to better inform their credit loss estimates. The amendments in this ASU are effective for fiscal years beginning after December 15, 2019, and for interim periods therein. The Company does not expect the amended standard to have a material impact on the Company’s results of operations. In March 2016, the FASB issued ASU No. 2016-09, “Improvements to Employee Share-Based Payment Accounting.” Excess tax benefits and deficiencies will be recognized in the consolidated statement of earnings rather than capital in excess of par value of stock on a prospective basis. A policy election will be available to account for forfeitures as they occur, with the cumulative effect of the change recognized as an adjustment to retained earnings at the date of adoption. Excess tax benefits within the consolidated statement of cash flows will be presented as an operating activity (prospective or retrospective application) and cash payments to tax authorities in connection with shares withheld for statutory tax withholding requirements will be presented as a financing activity (retrospective application). The guidance is effective beginning in 2017. Adoption of ASU No. 2016-09 did not have a material impact on the Company’s consolidated financial statements. In February 2016, the FASB issued ASU 2016-02, "Leases (Topic 842)." The new standard establishes a right-of-use ("ROU") model that requires a lessee to record a ROU asset and a lease liability on the balance sheet for all leases with terms longer than 12 months. Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition in the statement of operations. This ASU is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years and early adoption is permitted. A modified retrospective transition approach is required for capital and operating leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements, with certain practical expedients available. At a minimum, adoption of ASU 2016-02 will require recording a ROU asset and a lease liability on the Company's consolidated balance sheet; however, the Company is still currently evaluating the impact on its consolidated financial statements. In November 2015, the FASB issued ASU 2015-17, “Income Taxes (Topic 740) - Balance Sheet Classification of Deferred Taxes”. ASU 2015-17 requires that deferred tax liabilities and assets be classified as noncurrent in a classified statement of financial position. The amendments in ASU 2015-17 apply to all entities that present a classified statement of financial position. The current requirement that deferred tax liabilities and assets of a tax-paying component of an entity be offset and presented as a single amount is not affected. For public business entities, the amendments in ASU 2015-17 are effective for financial statements issued for annual periods beginning after December 15, 2016, and interim periods within those annual periods. The Company elected to early adopt ASU 2015-17 prospectively in the fourth quarter of 2016. As a result, all deferred tax assets and liabilities have been presented as noncurrent on the consolidated balance sheet as of December 31, 2016. There was no impact on its results of operations as a result of the adoption of ASU 2015-17. In September 2015, the FASB issued Accounting Standards Update No. 2015-16, “Business Combinations (Topic 805): Simplifying the Accounting for Measurement-Period Adjustments”, or ASU 2015-16. This amendment requires the acquirer in a business combination to recognize in the reporting period in which adjustment amounts are determined, any adjustments to provisional amounts that are identified during the measurement period, calculated as if the accounting had been completed at the acquisition date. Prior to the issuance of ASU 2015-16, an acquirer was required to restate prior period financial statements as of the acquisition date for adjustments to provisional amounts. The amendments in ASU 2015-16 are to be applied prospectively upon adoption. The Company adopted ASU 2015-16 in the fourth quarter of 2016. The adoption of the provisions of ASU 2015-16 did not have a material impact on its results of operations or financial position. In May 2014, the FASB issued Accounting Standards Update ("ASU") 2014-09, "Revenue from Contracts with Customers (Topic 606)." The new revenue recognition standard provides a five-step analysis to determine when and how revenue is recognized. The standard requires that a company recognizes revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which a company expects to be entitled in exchange for those goods or services. This ASU is effective for annual periods beginning after December 15, 2017 and will be applied retrospectively to each period presented or as a cumulative-effect adjustment as of the date of adoption. The Company expects to apply the modified retrospective method. As described further in Note 9, the Company acquired ARI in October 2017, and accordingly, the Company is in the process of assessing the revenue practices of the acquired business. Based on the evaluation performed to date, and excluding ARI, the Company does not expect the impact relating to the adoption of this standard to be material to the financial statements. It will result in expanded disclosure, including, related to the Company’s revenue streams, identification of performance obligations and significant judgments made to apply the new standard. However, the Company has not finalized its assessment at this time. |
Summary of Significant Accoun16
Summary of Significant Accounting Policies (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Accounting Policies [Abstract] | |
Reconciliation of shares used to determine net income per share | The reconciliation of shares used to determine net income per share is as follows: (dollars in thousands,unaudited): Three Months Nine Months ended September 30, ended September 30, 2017 2016 2017 2016 Net income $ 2,104 $ 4,789 $ 16,362 $ 12,562 Weighted average number of shares - basic 41,869,528 33,873,479 41,648,439 33,265,470 Shares underlying options 1,594,454 1,424,106 1,524,988 1,076,460 Weighted average number of shares outstanding diluted 43,463,982 35,297,585 43,173,427 34,341,930 |
Fair Value (Tables)
Fair Value (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Fair Value Disclosures [Abstract] | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation | The following is a roll forward of deferred acquisition costs through September 30, 2017. Total Deferred Acquisition Cost (in thousands, unaudited) Payable (1) Balance at December 31, 2016 $ 789 Payments (789) Balance at September 30, 2017 - (1) Represents deferred acquisition costs related to the acquisition of a supplier of refrigerants and compressed gases in January 2015. See Note 8 for further details. |
Fair Value Measurements, Recurring and Nonrecurring | (in thousands) As of December 31, 2016 Fair Value Measurements Carrying Amount Fair Value Level 1 Level 2 Level 3 Liabilities: Deferred acquisition cost $ 789 $ 789 - - $ 789 |
Inventories (Tables)
Inventories (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventory, Noncurrent | Inventories, net of reserve, consist of the following: September 30, 2017 December 31, 2016 (in thousands) (Unaudited) (Audited) Refrigerant and cylinders $ 16,491 $ 11,168 Packaged refrigerants 47,319 57,433 Total $ 63,810 $ 68,601 |
Property, plant and equipment (
Property, plant and equipment (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Property, Plant and Equipment [Abstract] | |
Property, Plant and Equipment | Elements of property, plant and equipment are as follows: September 30, 2017 December 31, 2016 Estimated Lives (Unaudited) (Audited) (in thousands) Property, plant and equipment - Land $ 535 $ 535 - Buildings 830 830 39 years - Building improvements 873 873 39 years - Equipment 15,473 13,423 3-7years - Equipment under capital lease 180 248 5-7 years - Vehicles 1,337 1,360 5 years - Lab and computer equipment, software 2,778 2,652 3-5 years - Furniture & fixtures 288 289 7-8 years - Leasehold improvements 119 119 3 years - Equipment under construction 371 1,654 Subtotal 22,784 21,983 Accumulated depreciation 15,715 14,451 Total $ 7,069 $ 7,532 |
Goodwill and intangible assets
Goodwill and intangible assets (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Company's other intangible assets | The Company’s other intangible assets consist of the following: September 30, 2017 (Unaudited) December 31, 2016 (Audited) (in thousands) Amortization Gross Gross Period Carrying Accumulated Carrying Accumulated (in years) Amount Amortization Net Amount Amortization Net Intangible Assets with determinable lives Patents 5 $ 386 $ 372 $ 14 $ 386 $ 366 $ 20 Covenant Not to Compete 6 10 1,270 437 833 1,270 322 948 Customer Relationships 3 10 2,000 620 1,380 2,000 452 1,548 Trade Name 2 30 30 - 30 30 - Licenses 10 1,000 292 708 1,000 217 783 Totals identifiable intangible assets $ 4,686 $ 1,751 $ 2,935 $ 4,686 $ 1,387 $ 3,299 |
Share-based compensation (Table
Share-based compensation (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Share-Based Compensation [Abstract] | |
Summary of status of company's stock option plan | A summary of the activity for stock options issued under the Company's Plans for the indicated periods is presented below: Weighted Average Stock Option Plan Totals Shares Exercise Price Outstanding at December 31, 2015 2,633,589 $ 2.06 -Exercised (589,725) $ 2.43 -Granted 1,170,534 $ 3.95 Outstanding at December 31, 2016 3,214,398 $ 2.68 -Exercised (984,861) $ 3.07 Outstanding at September 30, 2017, (unaudited) 2,229,537 $ 2.50 |
Weighted average contractual life and exercise price | The following is the weighted average contractual life in years and the weighted average exercise price at September 30, 2017 of: Weighted Average Remaining Weighted Average Number of Options Contractual Life Exercise Price Options outstanding and vested 2,229,537 1.7 years $ 2.50 |
Subsequent Event (Tables)
Subsequent Event (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Subsequent Events [Abstract] | |
Schedule Of Subsequent Event | Accordingly, such pro forma amounts are not necessarily indicative of the results that actually would have occurred had the acquisitions been completed at the beginning of 2016, nor are they indicative of the future operating results of the combined companies. Nine Months Ended September 30, (unaudited, in thousands) 2017 2016 Revenues $ 228,148 $ 205,228 Net income $ 26,317 $ 15,317 Net income per share Basic $ 0.63 $ 0.46 Diluted $ 0.61 $ 0.45 |
Summary of Significant Accoun23
Summary of Significant Accounting Policies - Reconciliation of Shares Used to Determine Net Income per Share (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Earnings Per Share Disclosure [Line Items] | ||||
Net income | $ 2,104 | $ 4,789 | $ 16,362 | $ 12,562 |
Weighted average number of shares - basic | 41,869,528 | 33,873,479 | 41,648,439 | 33,265,470 |
Weighted average number of shares outstanding - diluted | 43,463,982 | 35,297,585 | 43,173,427 | 34,341,930 |
Options [Member] | ||||
Earnings Per Share Disclosure [Line Items] | ||||
Shares underlying options | 1,594,454 | 1,424,106 | 1,524,988 | 1,076,460 |
Summary of Significant Accoun24
Summary of Significant Accounting Policies - Additional Information (Detail) - USD ($) $ in Millions | 1 Months Ended | 3 Months Ended | 9 Months Ended | |||
Oct. 31, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | |
Significant Accounting Policies [Line Items] | ||||||
Entity Incorporation Date Of Incorporation | Jan. 11, 1991 | |||||
Concentration risk, customer | two customers each accounted for 10% or more of the Companys revenues | two customers each accounted for 10% or more of the Companys revenues | ||||
Deferred tax asset | $ 1.9 | $ 1.9 | $ 2.5 | |||
Operating loss carryforwards, limitations on use | All the Companys remaining NOLs of approximately $4.1 million are subject to annual limitations of $1.3 million | |||||
Options and warrants excluded from the calculation of diluted shares | 0 | 73,034 | 0 | 123,034 | ||
Production and importation permission description | 22 million pounds in 2015 and reduces by approximately 4.5 million pounds each year and ends at zero in 2020 | |||||
Production Phase Down Percentage | 85.00% | |||||
Selling and Marketing Expense [Member] | ||||||
Significant Accounting Policies [Line Items] | ||||||
Prior Period Reclassification Adjustment | $ 0.9 | $ 3 | ||||
General and Administrative Expense [Member] | ||||||
Significant Accounting Policies [Line Items] | ||||||
Prior Period Reclassification Adjustment | $ 3.1 | $ 5.8 | ||||
Sales Revenue, Net [Member] | ||||||
Significant Accounting Policies [Line Items] | ||||||
Aggregate percentage of revenue the from customers accounted for more than 10% | 37.00% | 33.00% | ||||
Customer | ||||||
Significant Accounting Policies [Line Items] | ||||||
Accounts receivable, net | $ 4.3 | $ 4.3 |
Fair Value - Fair Value, Liabil
Fair Value - Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation (Detail) - Deferred Acquisition Costs [Member] $ in Thousands | 9 Months Ended | |
Sep. 30, 2017USD ($) | [1] | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Begining Balance | $ 789 | |
Payments | (789) | |
Ending Balance | $ 0 | |
[1] | Represents deferred acquisition costs related to the acquisition of a supplier of refrigerants and compressed gases in January 2015. See Note 8 for further details. |
Fair Value - Fair Value Measure
Fair Value - Fair Value Measurements, Recurring and Nonrecurring (Detail) - Fair Value Measurements [Member] $ in Thousands | Dec. 31, 2016USD ($) |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Deferred Acquisition Cost, Carrying Amount | $ 789 |
Deferred Acquisition Cost, Fair Value | 789 |
Fair Value, Inputs, Level 1 [Member] | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Deferred Acquisition Cost, Fair Value | 0 |
Fair Value, Inputs, Level 2 [Member] | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Deferred Acquisition Cost, Fair Value | 0 |
Fair Value, Inputs, Level 3 [Member] | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Deferred Acquisition Cost, Fair Value | $ 789 |
Inventories - Schedule of Inven
Inventories - Schedule of Inventory, Noncurrent (Detail) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Inventory [Line Items] | ||
Inventories, Total | $ 63,810 | $ 68,601 |
Refrigerant and cylinders [Member] | ||
Inventory [Line Items] | ||
Inventories, Total | 16,491 | 11,168 |
Packaged refrigerants [Member] | ||
Inventory [Line Items] | ||
Inventories, Total | $ 47,319 | $ 57,433 |
Property, plant and equipment28
Property, plant and equipment (Detail) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2017 | Dec. 31, 2016 | |
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Subtotal | $ 22,784 | $ 21,983 |
Accumulated depreciation | 15,715 | 14,451 |
Total | 7,069 | 7,532 |
Land [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Subtotal | 535 | 535 |
Buildings [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Subtotal | $ 830 | 830 |
Estimated Lives | 39 years | |
Building improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Subtotal | $ 873 | 873 |
Estimated Lives | 39 years | |
Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Subtotal | $ 15,473 | 13,423 |
Equipment [Member] | Minimum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Estimated Lives | 3 years | |
Equipment [Member] | Maximum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Estimated Lives | 7 years | |
Equipment under capital lease [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Subtotal | $ 180 | 248 |
Equipment under capital lease [Member] | Minimum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Estimated Lives | 5 years | |
Equipment under capital lease [Member] | Maximum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Estimated Lives | 7 years | |
Vehicles [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Subtotal | $ 1,337 | 1,360 |
Estimated Lives | 5 years | |
Lab and computer equipment, software [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Subtotal | $ 2,778 | 2,652 |
Lab and computer equipment, software [Member] | Minimum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Estimated Lives | 3 years | |
Lab and computer equipment, software [Member] | Maximum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Estimated Lives | 5 years | |
Furniture & fixtures [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Subtotal | $ 288 | 289 |
Furniture & fixtures [Member] | Minimum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Estimated Lives | 7 years | |
Furniture & fixtures [Member] | Maximum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Estimated Lives | 8 years | |
Leasehold improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Subtotal | $ 119 | 119 |
Estimated Lives | 3 years | |
Equipment under construction [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Subtotal | $ 371 | $ 1,654 |
Property, plant and equipment -
Property, plant and equipment - Additional Information (Detail) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Property, Plant and Equipment [Line Items] | ||
Depreciation | $ 1.3 | $ 1.3 |
Goodwill and intangible asset30
Goodwill and intangible assets (Detail) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2017 | Dec. 31, 2016 | |
Intangible Assets with determinable lives | ||
Gross Carrying Amount | $ 4,686 | $ 4,686 |
Accumulated Amortization | 1,751 | 1,387 |
Net | $ 2,935 | 3,299 |
Licenses [Member] | ||
Intangible Assets with determinable lives | ||
Amortization Period (in years) | 10 years | |
Gross Carrying Amount | $ 1,000 | 1,000 |
Accumulated Amortization | 292 | 217 |
Net | $ 708 | 783 |
Trade Name [Member] | ||
Intangible Assets with determinable lives | ||
Amortization Period (in years) | 2 years | |
Gross Carrying Amount | $ 30 | 30 |
Accumulated Amortization | 30 | 30 |
Net | $ 0 | 0 |
Patents [Member] | ||
Intangible Assets with determinable lives | ||
Amortization Period (in years) | 5 years | |
Gross Carrying Amount | $ 386 | 386 |
Accumulated Amortization | 372 | 366 |
Net | 14 | 20 |
Covenant Not to Compete [Member] | ||
Intangible Assets with determinable lives | ||
Gross Carrying Amount | 1,270 | 1,270 |
Accumulated Amortization | 437 | 322 |
Net | $ 833 | 948 |
Covenant Not to Compete [Member] | Maximum [Member] | ||
Intangible Assets with determinable lives | ||
Amortization Period (in years) | 10 years | |
Covenant Not to Compete [Member] | Minimum [Member] | ||
Intangible Assets with determinable lives | ||
Amortization Period (in years) | 6 years | |
Customer Relationships [Member] | ||
Intangible Assets with determinable lives | ||
Gross Carrying Amount | $ 2,000 | 2,000 |
Accumulated Amortization | 620 | 452 |
Net | $ 1,380 | $ 1,548 |
Customer Relationships [Member] | Maximum [Member] | ||
Intangible Assets with determinable lives | ||
Amortization Period (in years) | 10 years | |
Customer Relationships [Member] | Minimum [Member] | ||
Intangible Assets with determinable lives | ||
Amortization Period (in years) | 3 years |
Goodwill and intangible asset31
Goodwill and intangible assets - Additional Information (Detail) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Indefinite-lived Intangible Assets [Line Items] | ||
Amortization of Intangible Assets | $ 0.4 | $ 0.4 |
Share-based compensation - Summ
Share-based compensation - Summary of Status of Company's Stock Option Plan (Detail) - $ / shares | 9 Months Ended | 12 Months Ended |
Sep. 30, 2017 | Dec. 31, 2016 | |
Shares | ||
-Exercised | (984,861) | |
Stock Option Plan | ||
Shares | ||
Outstanding at beginning of period | 3,214,398 | 2,633,589 |
-Exercised | (984,861) | (589,725) |
-Granted | 1,170,534 | |
Outstanding at end of period | 2,229,537 | 3,214,398 |
Weighted Average Exercise Price | ||
Outstanding at beginning of period | $ 2.68 | $ 2.06 |
-Exercised | 3.07 | 2.43 |
-Granted | 3.95 | |
Outstanding at end of period | $ 2.5 | $ 2.68 |
Share-based compensation - Weig
Share-based compensation - Weighted Average Contractual Life and Exercise Price (Detail) | 9 Months Ended |
Sep. 30, 2017$ / sharesshares | |
Schedule of Share based Compensation Arrangements by Share based Payment Award, Performance Options [Line Items] | |
Number of Options, Options outstanding and vested | shares | 2,229,537 |
Weighted Average Remaining Contractual Life, Options outstanding and vested | 1 year 8 months 12 days |
Weighted Average Exercise Price, Options outstanding and vested | $ / shares | $ 2.50 |
Share-based compensation - Addi
Share-based compensation - Additional Information (Detail) - USD ($) | 1 Months Ended | 9 Months Ended | ||||
Sep. 17, 2014 | Aug. 27, 2008 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | Sep. 10, 2004 | |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||||
Share based compensation expense | $ 28,000 | $ 601,000 | ||||
Issuance of stock option to purchase stock | 6,000,000 | |||||
Common stock reserved for issuance | 3,251,340 | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross | 1,170,534 | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Intrinsic Value | $ 11,800,000 | $ 17,100,000 | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period, Intrinsic Value | $ 5,200,000 | $ 1,500,000 | ||||
Number Of Shares Withheld | 414,229 | |||||
Share-Based Compensation Arrangement By Share-Based Payment Award, Options, Exercises In Period | 984,861 | |||||
Payments Related to Tax Withholding for Share-based Compensation | $ 1,235,000 | $ 0 | ||||
Customer Concentration Risk [Member] | ||||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross | 0 | |||||
2004 Stock Incentive Plan | ||||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||||
Common stock reserved for issuance | 2,500,000 | |||||
2014 Stock Incentive Plan | ||||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||||
Common stock reserved for issuance | 3,000,000 | |||||
Plan expiration date | Sep. 17, 2024 | |||||
Share based compensation arrangement by share based payment award percentage of fair market Person holding more then 10% voting stock | 110.00% | |||||
2008 Stock Incentive Plan | ||||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||||
Common stock reserved for issuance | 3,000,000 | |||||
Plan expiration date | Aug. 27, 2018 | |||||
Share based compensation arrangement by share based payment award percentage of fair market Person holding more then 10% voting stock | 110.00% | |||||
2004 Employee Stock Plan | ||||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||||
Plan expiration date | Sep. 10, 2014 |
Debt - Additional Information (
Debt - Additional Information (Detail) | Apr. 08, 2016USD ($) | Jul. 01, 2015 | Sep. 30, 2017USD ($) | Feb. 15, 2013USD ($) | Jun. 22, 2012USD ($) |
Credit facility maximum borrowing | $ 40,000,000 | $ 50,000,000 | |||
Interest rate description under PNC facility | Interest charges with respect to loans were computed on the actual principal amount of loans outstanding during the month at a rate per annum equal to (A) with respect to Domestic Rate Loans (as defined in the PNC Facility), the sum of the Alternate Base Rate (as defined in the PNC Facility) plus one half of one percent (.50%) and (B) with respect to Eurodollar Rate Loans, the sum of the Eurodollar Rate plus two and one quarter of one percent (2.25%). | ||||
Line of Credit Facility, Current Borrowing Capacity | $ 50,000,000 | ||||
Letters of Credit Outstanding, Amount | $ 130,000 | ||||
Fifth Amendment [Member] | |||||
Line of Credit Facility, Expiration Date | Jun. 30, 2020 | ||||
Revolving Credit Facility [Member] | |||||
Credit facility maximum borrowing | 36,000,000 | $ 46,000,000 | |||
Revolving Credit Facility [Member] | Fourth Amendment [Member] | |||||
Interest rate description under PNC facility | Revolving Interest Rate shall mean an interest rate per annum equal to (a) the sum of the Alternate Base Rate (as defined in the PNC Facility) plus one half of one percent (.50%) with respect to Domestic Rate Loans and (b) the sum of the Eurodollar Rate plus two and one quarter of one percent (2.25%) with respect to the Eurodollar Rate Loans. | ||||
Revolving Credit Facility [Member] | Base Rate [Member] | |||||
Debt instrument, description of variable rate basis | Alternate Base Rate plus one half of one percent (.50%) | ||||
Revolving Credit Facility [Member] | Base Rate [Member] | Fourth Amendment [Member] | |||||
Debt instrument, description of variable rate basis | Base Rate (as defined in the PNC Facility) plus one half of one percent (.50%) | ||||
Revolving Credit Facility [Member] | Eurodollar [Member] | Fourth Amendment [Member] | |||||
Debt instrument, description of variable rate basis | Eurodollar Rate plus two and one quarter of one percent (2.25%) | ||||
Minimum [Member] | |||||
Fixed charge coverage ratio | 1 | ||||
Minimum [Member] | Fifth Amendment [Member] | |||||
Credit facility maximum borrowing | $ 40,000,000 | ||||
Minimum [Member] | Revolving Credit Facility [Member] | Fifth Amendment [Member] | |||||
Credit facility maximum borrowing | 36,000,000 | ||||
Maximum [Member] | |||||
Fixed charge coverage ratio | 1.10 | ||||
Maximum [Member] | Fifth Amendment [Member] | |||||
Credit facility maximum borrowing | 50,000,000 | ||||
Maximum [Member] | Revolving Credit Facility [Member] | Fifth Amendment [Member] | |||||
Credit facility maximum borrowing | $ 46,000,000 | ||||
Term Loan [Member] | |||||
Credit facility maximum borrowing | $ 4,000,000 | ||||
Term Loan [Member] | Eurodollar [Member] | |||||
Fixed charge coverage ratio percentage | 2.25% |
Acquisitions - Additional Infor
Acquisitions - Additional Information (Detail) - USD ($) | 1 Months Ended | 9 Months Ended | 12 Months Ended |
Jan. 16, 2015 | Sep. 30, 2017 | Dec. 31, 2015 | |
Business Acquisition Purchase Price Allocation Description | The purchase price for this acquisition was $2.4 million cash paid at closing and the assumption of a liability of $20,000, and a maximum of an additional $3.0 million earn-out. | ||
Tangible assets | $ 1,600,000 | ||
Intangible assets | 1,600,000 | ||
Goodwill | $ 2,300,000 | ||
Business Combination, Contingent Consideration Arrangements, Range of Outcomes, Value, High | $ 3,000,000 | ||
Business Combination, Contingent Consideration Arrangements, Change in Amount of Contingent Consideration, Liability | 1,000,000 | ||
Business Combination, Provisional Information, Initial Accounting Incomplete, Adjustment, Goodwill | 1,900,000 | ||
Business Combination, Provisional Information, Initial Accounting Incomplete, Adjustment, Intangibles | 800,000 | ||
Business Combination, Provisional Information, Initial Accounting Incomplete, Adjustment, Inventory | 100,000 | ||
Minimum [Member] | |||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Net, Total | 4,400,000 | ||
Maximum [Member] | |||
Allocated Share Based Compensation Expense | $ 3,000,000 | ||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Net, Total | $ 5,400,000 |
Subsequent Event (Details)
Subsequent Event (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Revenues | $ 24,706 | $ 34,930 | $ 115,766 | $ 97,701 |
Net income | $ 2,104 | $ 4,789 | $ 16,362 | $ 12,562 |
Net income per share | ||||
Basic | $ 0.05 | $ 0.14 | $ 0.39 | $ 0.38 |
Diluted | $ 0.05 | $ 0.14 | $ 0.38 | $ 0.37 |
Pro Forma [Member] | Airgas Refrigerants, Inc. [Member] | ||||
Revenues | $ 228,148 | $ 205,228 | ||
Net income | $ 26,317 | $ 15,317 | ||
Net income per share | ||||
Basic | $ 0.63 | $ 0.46 | ||
Diluted | $ 0.61 | $ 0.45 |
Subsequent Event - Additional I
Subsequent Event - Additional Information (Detail) - USD ($) | Oct. 10, 2017 | Sep. 30, 2017 | Feb. 15, 2013 | Jun. 22, 2012 |
Subsequent Event [Line Items] | ||||
Line of Credit Facility, Maximum Borrowing Capacity | $ 40,000,000 | $ 50,000,000 | ||
Airgas Refrigerants, Inc. [Member] | Pro Forma [Member] | ||||
Subsequent Event [Line Items] | ||||
Business Combination, Acquisition Related Costs | $ 2,400,000 | |||
Subsequent Event [Member] | Term Loan [Member] | ||||
Subsequent Event [Line Items] | ||||
Line of Credit Facility, Maximum Borrowing Capacity | $ 25,000,000 | |||
Debt Instrument, Face Amount | 105,000,000 | |||
Proceeds from Bank Debt | $ 105,000,000 | |||
Debt Instrument, Payment Terms | Principal payments on the Term Loans are required on a quarterly basis, commencing with the quarter ending March 31, 2018, in the amount of 1% of the original principal amount of the outstanding Term Loans per annum. The Term Loan Facility also requires annual payments of up to 50% of Excess Cash Flow (as defined in the Term Loan Facility) depending upon the Company’s Total Leverage Ratio (as defined in the Term Loan Facility) for the applicable year. The Term Loan Facility also requires mandatory prepayments of the Term Loans in the event of certain asset dispositions, debt issuances, and casualty and condemnation events. The Term Loans may be prepaid at the option of the Borrowers at par in an amount up to $30 million. Additional prepayments are permitted after the first anniversary of the closing date subject to a prepayment premium of 3% in year two, 1% in year three and zero in year four and thereafter. | |||
Debt Instrument, Maturity Date | Oct. 10, 2023 | |||
Debt Instrument, Description of Variable Rate Basis | LIBOR plus 7.25% | |||
Debt Instrument, Basis Spread on Variable Rate | 7.25% | |||
Debt Instrument, Interest Rate, Stated Percentage | 3.00% | |||
Subsequent Event [Member] | PNC Bank [Member] | ||||
Subsequent Event [Line Items] | ||||
Line of Credit Facility, Maximum Borrowing Capacity | $ 150,000,000 | |||
Proceeds from Lines of Credit | $ 80,000,000 | |||
Debt Instrument, Interest Rate Terms | (a) each three months from the commencement of such Eurodollar rate loan or (b) the end of the interest period. Interest charges with respect to loans are computed on the actual principal amount of loans outstanding during the month at a rate per annum equal to (A) with respect to domestic rate loans, the sum of (i) a rate per annum equal to the higher of (1) the base commercial lending rate of PNC, (2) the federal funds open rate plus 0.5% and (3) the daily LIBOR plus 1.0%, plus (ii) between 0.50% and 1.00% depending on average quarterly undrawn availability and (B) with respect to Eurodollar rate loans, the sum of the Eurodollar rate plus between 1.50% and 2.00% depending on average quarterly undrawn availability. | |||
Subsequent Event [Member] | PNC Bank [Member] | Letter of Credit [Member] | ||||
Subsequent Event [Line Items] | ||||
Line of Credit Facility, Maximum Borrowing Capacity | $ 5,000,000 | |||
Subsequent Event [Member] | PNC Bank [Member] | Swing Line Loan [Member] | ||||
Subsequent Event [Line Items] | ||||
Line of Credit Facility, Maximum Borrowing Capacity | 15,000,000 | |||
Subsequent Event [Member] | Airgas, Inc. [Member] | ||||
Subsequent Event [Line Items] | ||||
Transaction valued on gross basis | 209,000,000 | |||
Payments to Acquire Businesses, Gross | $ 80,000,000 |