Hudson Technologies, Inc. (HDSN) research, news, and more from GeoInvesting

Company description

Tue, 08 Apr 2008 04:00:00 GMT

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

Research

Thu, 09 Mar 2023 15:26:25 GMT

Hudson Technologies, Inc. (NASDAQ:HDSN) ($9.44, $427.5M market cap) a refrigerant services company, provides reclamation solutions within the refrigeration industry primarily in the United States announced Q4 2022 results:

Sales of $47.4 million vs $37.7 million in the prior year, well ahead of analyst estimates of $37.4 million
EPS of $0.11 vs $0.13 in the prior year and ahead of analyst estimates of $0.07

“2022 was a tremendous year for Hudson as evidenced by record revenues, and enhanced profitability. We delivered a solid fourth quarter consistent with historical fourth quarter performance, which is typically our lowest revenue quarter because it falls outside of our nine-month selling season. During the fourth quarter of 2022, gross margin fell just below our long-range target gross margin of 35%, but we do not believe this slightly lower fourth quarter gross margin will affect our long-term target. With the enhanced profitability and strong free cash flow achieved in 2022, we substantially reduced our total outstanding debt from approximately $95 million at year-end 2021, to $47 million at year-end 2022. The success of our operational execution allowed us to strengthen our balance sheet, providing improved financial flexibility as we begin moving through 2023.”

Main Takeaways:

Gross margin drop from prior elevated levels of well over 40%.
- Will lead to EPS decreasing, even if revenue increases
Stock is still cheap on a P/E basis, but drop in growth clouds timeliness

Quote from conference call on margins:

“Well, it is a baseline certainly for 2023 and beyond. The question is when might we get to that level on a consistent basis? We still think there is some upside to the margin. But right now, I think, thinking of it in the context of 35% makes the most sense.”

Research

Thu, 03 Nov 2022 14:46:45 GMT

Hudson Technologies, Inc. (NASDAQ:HDSN) ($8.85, $398.4M market cap) a refrigerant services company, provides reclamation solutions within the refrigeration industry primarily in the United States. The company reported Q3 2022 results:

Sales of $89.5 million vs $60.6 million in the prior year, ahead of analyst estimates of $96 million
Non-GAAP EPS of $0.57 vs $0.34 in the prior year, ahead of analyst estimates of $0.39

“Our third quarter performance delivered a strong close to our 2022 selling season, as reflected in continued record revenues, improved margins and enhanced profitability. Throughout the selling season we benefited from sustained higher pricing of certain refrigerants, as well as our strategic positioning in the supply chain for refrigerants. Our enhanced profitability and strong free cash flow in 2022 have allowed us to reduce total debt, including approximately $31 million paid down in the third quarter, strengthening our balance sheet and improving our financial flexibility as we move through the close of this year and into 2023.

As we expected, gross margin in the third quarter, while significantly improved compared to the third quarter of last year, has begun to show sequential moderation as compared to gross margins in the first and second quarters of 2022, as the gap between inventory cost and sales price has begun to narrow…

…With a 10% step down mandate for 2022 and 2023 and a 40% baseline reduction in virgin production starting 2024, we expect this phasedown to provide an inflection point for our business as the industry begins to rely on reclaimed refrigerant to meet its HFC needs."

The company continues to aggressively pay down its debt, which should ultimately lead to a multiple re-rating while on its path to become debt free. With trailing non-GAAP EPS of $1.93, the company is trading at trailing P/E of 4.6.

We will need clarity on the margin picture heading into 2023 and beyond. For example, in 2023, even though sales are expected to increase 6.6% and EPS is expected to come in at $1.01, it remains to be seen if investors will ignore such a drop in EPS, However, the P/E is still very low (9.9 ) on 2023 estimates, and the long-term growth growth tailwinds are still very strong for the company.

Research

Thu, 04 Aug 2022 04:00:00 GMT

Hudson Technologies, Inc. (NASDAQ:HDSN) ($9.30, $417.6M market cap) a refrigerant services company, provides reclamation solutions within the refrigeration industry primarily in the United States. The company reported Q2 2022 results:

Sales of $103.9 million vs $60.5 million in the prior year, ahead of analyst estimates of $96 million
Non-GAAP EPS of $0.59 vs $0.24 in the prior year, ahead of analyst estimates of $0.39

“Given the pricing dynamics to date for the current selling season, we are increasing our previously stated 2022 forecast and longer-term targets. Based on current pricing levels, we should see revenues in excess of $290 million for full year 2022. While we continue to believe margin performance for the full year will moderate due to increases in inventory cost and anticipated stabilization in sales prices during the balance of this season, with our visibility today we now believe full year blended gross margin will be at least in the mid 40% range.

In 2022, we are seeing the accelerated shift to what we expect will be significantly higher and sustained profitability for the business going forward. Assuming further HFC price increases related to the HFC phasedown under the AIM Act, albeit at a slower pace than we saw in 2022, we are targeting annualized revenue of greater than $400 million by 2025 with gross margins remaining above historical levels but moderating over the next three years to approximately 35%."

Despite raising revenue guidance from the prior guidance of $270 million, the topline $290 million guidance is still below analysts estimates of $305.8 million, although management states “at least” leaving room for upside. We are more concerned how investors will react to the blended margin comments, which could lead to depressed margins in the second half and further out to 2025.

Research

Thu, 01 Sep 2016 16:10:00 GMT

Interview Updates

We are scheduled to speak with $HDSN ($6.47), a refrigerant service company at noon today. We highlighted HDSN’s strong Q2 2016 results in our August 3, 2016 email. Shares are up sharply in the last month on the heels of a large government contract and the strong Q2 results. We will attempt to determine if the growth story can justify higher prices for the stock. There are some regulatory changes taking place in the industry the company serves that could have positive or negative connotations. We need to gain more color on this balance.

Comments & Business Outlook

Wed, 03 Aug 2016 14:46:19 GMT

Reported Second Quarter 2016 Results

Sales of $34.6 million vs $28.6 million in the prior year
EPS $0.14 vs $0.08 in the prior year

Quotes from management:

Kevin J. Zugibe, Chairman and Chief Executive Officer of Hudson Technologies commented, “Building on the momentum from our strong first quarter performance, we’re very pleased to have delivered record revenues, enhanced margins and significantly improved profitability in the second quarter of 2016. During the quarter, which represents the midpoint of our nine- month refrigerant sales season, we benefitted from continued increases in the average selling price for R-22 refrigerant.

“We continue to see growth in our reclamation business. We believe there is a broader opportunity for reclamation in response to both the ongoing R-22 production phase-out and for the expected phase-out of next generation HFC-based refrigerants. HFCs, which are the replacement refrigerants for HCFCs such as R-22, have drawn concern from the global community due to their high global warming potential and have also been targeted for a global phase down. Hudson is the largest reclaimer in the industry, and we believe our proprietary technology, strong distribution network and longstanding relationships make us the best resource for our customers as they prepare for ongoing and upcoming refrigerant phase-outs.”

Mr. Zugibe concluded, “We are very excited about winning a substantial contract from the DoD. While the ultimate amount of revenue we receive will be determined by order levels, we believe this contract will contribute considerable future revenue and earnings growth and provide future opportunities for Hudson to generate revenues from the Federal government as a prime contractor.”