Hudson Technologies (HDSN:NASDAQ) is a leading provider of refrigerants and reclamation services for commercial refrigeration and air conditioning systems in the United States. The company also provides proprietary on-site decontamination services and energy efficiency assessments. In addition, Hudson Technologies has a strategic alliance to market its service offerings outside the United States with the German industrial gases giant Linde.

In early May, Hudson Technologies announced an outstanding earnings report. The company reported record first quarter revenues of over $11 million, an increase of 40% from the same quarter last year. Net income for the first quarter came in at 9 cents per shares versus only 1 cent per share last year. These figures resulted from the company’s growing reputation as a leader in refrigerant reclamation, which in turn allows Hudson to sell refrigerants to a broader and more diverse customer base.

Hudson Technologies seems poised to enjoy continued strong growth in their business. The air conditioning and refrigeration industry is approaching a critical juncture. The industry is preparing for the phase-out and ultimate ban on the production of HCFC refrigerants beginning in 2010. Currently, over 60% of the $1 billion refrigerant market is comprised of HCFCs. Also many large-scale chillers, which are costly to replace and have long life spans, were designed to run using HCFC gas. Manufacturers will become increasingly limited in how much new HCFC gas they can produce. But the demand for HCFC gas will continue to be there.

The gap between supply and demand for HCFC gas will have to filled by reclaimed HCFC gas. This is where Hudson Technologies intends to step-up and meet that demand. During the phase-out of CFC gases in the 1990s, Hudson Technologies became one of the market leaders due to its superior equipment and infrastructure. This phase-out of HCFCs is on a much larger scale and Hudson Technologies is poised to benefit from it.

Let us hear your thoughts below: