Hudson Technologies Inc (HDSN) 2023 Q3 法說會逐字稿

Greetings. Welcome to the Hudson Technologies Third Quarter 2023 Earnings Call. (Operator Instructions) Please note, this conference is being recorded.

問候。歡迎參加 Hudson Technologies 2023 年第三季財報電話會議。 （操作員說明）請注意，本次會議正在錄製中。

I will now turn the conference over to your host, Jennifer Belodeau. You may begin.

現在我將會議交給主持人珍妮佛貝洛多 (Jennifer Belodeau)。你可以開始了。

Thank you. Good evening, and welcome to our conference call to discuss Hudson Technologies financial results for the third quarter of 2023. On the call today are Brian Coleman, President and Chief Executive Officer; and Nat Krishnamurti, CFO.

謝謝。晚上好，歡迎參加我們的電話會議，討論 Hudson Technologies 2023 年第三季的財務業績。今天參加電話會議的是總裁兼執行長 Brian Coleman；和財務長納特·克里希納穆提 (Nat Krishnamurti)。

I'll now take a moment to read the safe harbor statement. During the course of this conference call, we will make certain forward-looking statements. All statements that address expectations, opinions or predictions about the future are forward-looking statements. Although they reflect our current expectations and are based on our best view of the industry and of our businesses as we see them today, they are not guarantees of future performance.

我現在花點時間閱讀安全港聲明。在本次電話會議期間，我們將做出某些前瞻性聲明。所有涉及對未來的期望、意見或預測的陳述均為前瞻性陳述。儘管它們反映了我們當前的期望，並且基於我們今天對行業和業務的最佳看法，但它們並不能保證未來的業績。

Please understand that these statements involve a number of risks and assumptions. And since those elements can change and in certain cases, are not within our control, we would ask that you consider and interpret them in that light. We urge you to review Hudson's most recent Form 10-K and other subsequent SEC filings for a discussion of the principal risks and uncertainties that affect our business and our performance and of the factors that could cause our actual results to differ materially.

請理解這些陳述涉及許多風險和假設。由於這些因素可能會發生變化，並且在某些情況下不在我們的控制範圍內，因此我們要求您從這個角度考慮和解釋它們。我們強烈建議您查看 Hudson 最近的 10-K 表格和其他後續向 SEC 提交的文件，以討論影響我們業務和業績的主要風險和不確定性，以及可能導致我們的實際結果出現重大差異的因素。

With that out of the way, I'll turn the call over to Brian Coleman. Go ahead, Brian.

解決這個問題後，我會將電話轉給布萊恩科爾曼。繼續吧，布萊恩。

Good evening, and thank you for joining us. We delivered solid third quarter results, which included continued profitability and strong cash flow to close out our traditional 9-month cooling season. That said, as we expected, on a comparative basis, third quarter 2023 revenue margin decreased relative to the significantly strong revenue margin performance achieved in 2022.

晚上好，感謝您加入我們。我們交付了穩健的第三季業績，其中包括持續的盈利能力和強勁的現金流，以結束我們傳統的 9 個月的降溫季節。儘管如此，正如我們所預期的那樣，相較之下，2023 年第三季的營收利潤率相對於 2022 年實現的強勁收入利潤率表現有所下降。

The primary driver for the comparative decrease was a 27% decline in the sales price for certain refrigerants when compared to the third quarter of 2022. As we detailed previously, throughout most of 2022, we saw a substantial sale price increases without a corresponding increase in inventory price.

相對下降的主要原因是某些冷媒的銷售價格與2022 年第三季相比下降了27%。正如我們之前所詳述的，在2022 年的大部分時間裡，我們看到銷售價格大幅上漲，但冷媒的銷售價格卻沒有相應增加。庫存價格。

Conversely, the 2023 cooling season was characterized both a challenging pricing environment and lower sales volume for the 9-month season. Specifically, for the 9-month period, we saw a decline of approximately 17% in the sale price of certain refrigerants as compared to the first 9 months of last year. In addition, the late arrival of warmer weather to many parts of the U.S., which impacted demand for certain refrigerants slightly impacted volume unfavorably for this season.

相反，2023 年製冷季的特點是定價環境充滿挑戰，而且 9 個月的製冷季銷售量較低。具體而言，在這 9 個月期間，我們發現某些冷媒的銷售價格與去年前 9 個月相比下降了約 17%。此外，美國許多地區的溫暖天氣較晚到來，影響了某些冷媒的需求，對本季的銷售量產生了不利影響。

Even with the significant pricing headwinds, we achieved our gross margin of 40%, which is slightly higher than our long-term targeted gross margin levels. Margins were favorably impacted again this quarter, similar to what we saw in the second quarter of this year from higher-margin carbon sales and from sales related to the DLA contract.

即使面臨巨大的定價阻力，我們仍實現了 40% 的毛利率，略高於我們的長期目標毛利率水準。本季利潤率再次受到有利影響，類似於我們在今年第二季度從利潤率較高的碳銷售和與 DLA 合約相關的銷售中看到的情況。

Without those additional contributions, gross margins would have been closer to 38%. As we mentioned last quarter, we are tracking toward the highest annual revenue from our DLA contract. From our vantage point, we remain comfortable with our long-range gross margin target of 35%.

如果沒有這些額外貢獻，毛利率將接近 38%。正如我們上季度提到的，我們正在努力實現 DLA 合約的最高年收入。從我們的角度來看，我們仍然對 35% 的長期毛利率目標感到滿意。

Our ability to consistently deliver strong profitable and operating cash flow allowed us to aggressively pay down our debt during the last several quarters, and that progressed -- that progress culminated with the full repayment of our term loan during the quarter.

我們持續提供強勁獲利和營運現金流的能力使我們能夠在過去幾季積極償還債務，而這一進展最終以在本季度全額償還定期貸款而告終。

Notably, we're very pleased to achieve the full repayment well ahead of our March 2027 maturity date. And we anticipate that the elimination of this debt will enable us to further reduce our interest expense and improve our balance sheet.

值得注意的是，我們非常高興能夠在 2027 年 3 月到期日之前提前全額還款。我們預計，消除這筆債務將使我們能夠進一步減少利息支出並改善我們的資產負債表。

As you know, our industry is preparing for the unprecedented 40% baseline reduction in virgin HFC production and consumption allowances, which will be effective at the start of 2024. We believe that the current phasedown represents a significant opportunity for our business.

如您所知，我們的行業正在準備將原始 HFC 生產和消費配額史無前例地削減 40%，該削減將於 2024 年初生效。我們相信，當前的逐步削減對我們的業務來說是一個重大機會。

With the current installed base of HFC equipment, which is currently estimated at 125 million units, the aggressive reduction in virgin HFC production is expected to meaningful impact the supply landscape creating enhanced demand for reclaim refrigerants over time to fill what is anticipated to become a substantial gap between HFC supply and demand.

目前HFC 設備的安裝量預計為1.25 億台，原始HFC 產量的大幅減少預計將對供應格局產生重大影響，隨著時間的推移，對回收冷媒的需求將增加，以填補預計將出現的大量製冷劑 需求。HFC 供需缺口。

Additionally, the reclamation industry is positioned to benefit as the regulatory environment around refrigerants and cooling equipment becomes more stringent. There are ongoing efforts on both the state and federal levels to require tracking and detailed reporting designed to keep track of refrigerants from cradle to end of life as a means to deter the practice of venting and to encourage reclamation.

此外，隨著冷媒和冷卻設備的監管環境變得更加嚴格，回收業也將從中受益。州和聯邦層面正在不斷努力，要求追蹤和詳細報告，旨在追蹤冷媒從搖籃到使用壽命結束的整個過程，以此阻止排放做法並鼓勵回收。

Many of you have likely seen the EPA's rules issued in early October. The first was the finalization of the technology transition rule and the agency also published a long-awaited proposed refrigerant management rule.

你們中的許多人可能已經看到 EPA 於 10 月初發布的規則。首先是技術轉型規則的最終確定，該機構還發布了期待已久的擬議冷媒管理規則。

We are encouraged by the bold initiatives that the EPA has taken around the proposed refrigerant management rule, particularly those that outline potential mandates for the use of reclaim refrigerants by OEMs for new systems, and the use of reclaim refrigerants and servicing activities. These proposed initiatives will require a significant increase in reclaim volumes particularly for higher GWP HFCs such as 404A and 410A.

我們對 EPA 圍繞擬議的冷媒管理規則採取的大膽舉措感到鼓舞，特別是那些概述了原始設備製造商在新系統中使用回收冷媒以及回收冷媒和維修活動的潛在指令的舉措。這些建議措施將需要大幅增加回收量，特別是對於 404A 和 410A 等 GWP 較高的 HFC。

I want to stress that the refrigerant management rule is a proposed rule, which is currently making its way through the commentary process, but we are pleased with the aggressive stance set forth by the EPA. It's encouraging to see a broader proposed regulatory focus addresses venting deterrence, which should also increase the pool of refrigerant that can be recovered. It also promotes the adoption of lower GWP cooling technology and the use of reclaim refrigerants.

我想強調的是，冷媒管理規則是一項擬議規則，目前正在通過評論過程，但我們對 EPA 提出的積極立場感到滿意。令人鼓舞的是，看到更廣泛的擬議監管重點解決了排放威懾問題，這也應該增加可回收的冷媒池。它還促進採用較低 GWP 冷卻技術和回收冷媒的使用。

Hudson has an advantage as the industry shifts because we've long been a proponent and a practitioner of a circular economy of refrigerants and proper refrigerant management. Importantly, our technology is agnostic. We've been recovering and reclaiming refrigerants since the early 1990s, and our technology works with any and all types of refrigerant from legacy CFCs and HFCs to today's HFCs and to future HFOs.

隨著產業的轉變，哈德森具有優勢，因為我們長期以來一直是冷媒循環經濟和適當冷媒管理的支持者和實踐者。重要的是，我們的技術是不可知的。自 20 世紀 90 年代初以來，我們一直在回收和再利用冷媒，我們的技術適用於從傳統的 CFC 和 HFC 到今天的 HFC 和未來的 HFO 的任何和所有類型的冷媒。

Our operational model can essentially provide a closed loop in which refrigerant is sold into the market for new equipment or for servicing cooling systems, and later when service is required or the system reaches end of life, the gas is recovered and returned to Hudson for reclamation without any emission to the atmosphere. So we believe that we are uniquely positioned with our proprietary reclamation technology as well as our system optimization and conversion services to grow our leadership role in the shift of lower GWP refrigerants and cooling technologies.

我們的營運模式本質上可以提供一個閉環，其中冷媒被出售到市場以用於新設備或用於維修冷卻系統，隨後當需要維修或系統達到使用壽命時，氣體被回收並返回哈德遜進行回收沒有任何排放到大氣中。因此，我們相信，憑藉專有的回收技術以及系統優化和轉換服務，我們處於獨特的地位，可以增強我們在低 GWP 冷媒和冷卻技術轉變中的領導地位。

Longer term, we believe industry stakeholders will increasingly embrace the environmental benefits of using reclaim refrigerant, which is nearly a 0 GWP gas. Our ability to reclaim refrigerant is dependent on recovering refrigerant, and we are focused on working with customers who share our commitment to the circular economy for refrigerants.

從長遠來看，我們相信行業利益相關者將越來越多地接受使用回收冷媒（幾乎是一種 GWP 為 0 的氣體）帶來的環境效益。我們回收冷媒的能力取決於回收冷媒，我們致力於與與我們一樣致力於冷媒循環經濟的客戶合作。

We have also been very active in industry forums and conferences promoting our vision for the adoption of sustainable and responsible refrigerant management among our industry partners. Recent events and discussions that we have attended include the Greenbuild Conference, the Allied Air conference and several state plumbing, heating, cooling contractors association meetings.

我們也積極參與行業論壇和會議，宣傳我們在行業合作夥伴中採用可持續和負責任的冷媒管理的願景。我們最近參加的活動和討論包括綠色建築會議、聯合航空會議和幾個州管道、暖氣、冷氣承包商協會會議。

In July, Hudson's EMERALD Refrigerant, our reclaim refrigerant brand, was named top product of 2023 by Environment + Energy Leader, an awards program that recognizes excellence in products and projects that deliver significant energy and environmental benefits.

7 月，Hudson 的 EMERALD 冷媒（我們的回收冷媒品牌）被環境 + 能源領袖評選為 2023 年頂級產品，該獎項旨在表彰那些能夠帶來顯著能源和環境效益的卓越產品和項目。

We also recognize the importance of participating in global efforts to raise awareness and accelerate the global transition to efficient and climate-friendly cooling alternatives. In early October, Hudson announced that we joined the Cool Coalition, a global multi-stakeholder network assembled by the United Nations Environment Programme, that connects a wide range of key participants from government, cities, international organizations, businesses, finance, academia and civil society groups to facilitate knowledge exchange, advocacy and joint action toward climate-friendly cooling alternatives.

我們也認識到參與全球努力以提高意識並加速全球向高效和氣候友善的冷卻替代方案過渡的重要性。 10 月初，Hudson 宣布我們加入了Cool Coalition，這是一個由聯合國環境規劃署組建的全球多方利益相關者網絡，連接了來自政府、城市、國際組織、企業、金融、學術界和民間的廣泛主要參與者社會團體促進知識交流、宣傳和聯合行動，以實現氣候友善冷卻替代方案。

And I just returned from Nairobi, where last week Hudson participated at the 35th Meeting of the Parties of the Montreal Protocol on substances that deplete the ozone layer. We're pleased to have these opportunities to share our expertise and interact with other stakeholders on a global level.

我剛從內羅畢回來，哈德森上週在內羅畢參加了關於消耗臭氧層物質的蒙特利爾議定書第 35 次締約方會議。我們很高興有這些機會分享我們的專業知識並與全球其他利害關係人互動。

As we move through the balance of 2023, we remain focused on continuing to be a reliable resource to our customers by providing sustainable and responsible refrigerant management support. The fourth quarter of any given year is historically our lowest revenue gross margin quarter as we saw in 2022 with significantly lower sales volume as the cooling season ends and many of our customers have moved their focus to heating applications.

在 2023 年剩餘的時間裡，我們仍然致力於透過提供可持續和負責任的冷媒管理支持，繼續成為客戶的可靠資源。歷史上，任何一年的第四季度都是我們收入毛利率最低的季度，正如我們在2022 年看到的那樣，隨著製冷季節結束，銷量顯著下降，並且我們的許多客戶已將重點轉向供暖應用。

We believe that 2024 will represent an inflection point for the HFC market, and we are confident that our industry-leading reclamation technology, distribution network and optimization and conversion capabilities provide a strong foundation to grow our company and extend our leadership position as our industry embraces more sustainable, environmentally friendly practices and products to meet the growing worldwide demand for cooling and refrigeration solutions. This is an exciting time for our company and our industry, and we look forward to expanding the reach of our products and services as our industry continues to evolve.

我們相信2024 年將是HFC 市場的轉捩點，我們相信，隨著行業的發展，我們行業領先的回收技術、分銷網絡以及優化和轉換能力為我們公司的發展和擴大我們的領導地位奠定了堅實的基礎。更永續、更環保的做法和產品，以滿足全球對冷卻和製冷解決方案不斷增長的需求。對於我們公司和我們的行業來說，這是一個令人興奮的時刻，我們期待隨著我們行業的不斷發展擴大我們的產品和服務的範圍。

Now I'll turn the call over to Nat to review the financials. Go ahead, Nat.

現在我將把電話轉給 Nat，讓他審核財務狀況。繼續吧，納特。

Thank you, Brian. For the third quarter ended September 30, 2023, Hudson recorded revenues of $76.5 million, a decrease of 15% compared to revenues of $89.5 million in the comparable 2022 period. The decrease is primarily related to decreased selling prices for certain refrigerants, partially offset by increased refrigerant sales volume and revenues from the company's DLA or Defense Logistics Agency program during the period as compared to the third quarter of 2022.

謝謝你，布萊恩。截至 2023 年 9 月 30 日的第三季度，Hudson 的營收為 7,650 萬美元，與 2022 年同期的營收 8,950 萬美元相比下降了 15%。這一下降主要與某些冷媒的銷售價格下降有關，與 2022 年第三季相比，該期間冷媒銷售和公司 DLA 或國防後勤局計畫收入的增加部分抵消了這一下降。

Gross margin was 40% for the third quarter of 2023 compared to 49% in the third quarter of 2022. As expected and previously communicated, gross margin has begun to moderate as the gap between inventory cost and sales price narrows to more historical levels. Third quarter gross margin was favorably impacted by increased DLA and carbon credit revenue, and we remain comfortable with our long-range gross margin target of 35%.

2023 年第三季的毛利率為40%，而2022 年第三季的毛利率為49%。正如預期和先前所傳達的那樣，隨著庫存成本與銷售價格之間的差距縮小至歷史水平，毛利率已開始放緩。第三季毛利率受到 DLA 和碳信用收入增加的有利影響，我們對 35% 的長期毛利率目標仍然滿意。

SG&A for the third quarter of 2023 was $6.8 million compared to SG&A of $7.2 million recorded in the third quarter of 2022. We recorded operating income of $23.1 million in the third quarter of 2023 compared to operating income of $36.3 million in the third quarter of 2022.

2023 年第三季的銷售及管理費用為680 萬美元，而2022 年第三季的銷售及管理費用為720 萬美元。2023 年第三季的營業收入為2,310 萬美元，而2022 年第三季度的營業收入為3,630 萬美元。

The company recorded net income of $13.6 million or $0.30 per basic and $0.29 per diluted share in the third quarter of 2023 compared to net income of $29.4 million or $0.65 per basic and $0.62 per diluted share in the same period of 2022.

該公司2023 年第三季的淨利潤為1,360 萬美元，即每股基本收益0.30 美元，每股稀釋每股收益0.29 美元，而2022 年同期淨利潤為2,940 萬美元，即每股基本收益0.65 美元，每股稀釋收益0.62 美元。

During the third quarter of 2023, the company recorded $3.4 million of nonrecurring costs, primarily related to the write-off of deferred financing costs with respect to the full and final payoff of the company's term loan, which are included as interest expense in the company's statements of income.

2023年第三季度，該公司記錄了340萬美元的非經常性成本，主要與公司定期貸款全額和最終償還的遞延融資成本沖銷有關，這些成本作為利息費用計入公司的財務報表中。損益表。

Excluding these nonrecurring costs, Hudson achieved non-GAAP adjusted net income of $16.1 million or $0.35 per basic and $0.34 per diluted share in the third quarter of 2023. A reconciliation of net income and earnings per share to non-GAAP adjusted net income and non-GAAP adjusted earnings per share is included in today's press release.

排除這些非經常性成本，Hudson 在2023 年第三季實現非GAAP 調整後淨利1,610 萬美元，即每股基本收益0.35 美元，稀釋每股0.34 美元。淨利與每股收益與非GAAP 調整後淨利潤和非GAAP 淨利潤的調節表-今天的新聞稿中包含了公認會計原則調整後的每股收益。

Just a note related to net income. As Brian mentioned earlier, during the third quarter, Hudson paid off its remaining $32.5 million in term loan debt, an achievement we reached more than 3.5 years ahead of the March 2027 maturity date. Over the last 15 months, we have repaid $100 million in term loan debt, saving the company over $10 million of annualized interest.

只是與淨利潤相關的註解。正如布萊恩之前提到的，在第三季度，哈德遜還清了剩餘的 3,250 萬美元定期貸款債務，我們比 2027 年 3 月到期日提前了 3.5 年多才實現這一目標。在過去 15 個月中，我們償還了 1 億美元的定期貸款債務，為公司節省了超過 1,000 萬美元的年化利息。

We're pleased to have been able to pay off the term loan debt significantly ahead of schedule and anticipate that the elimination of this debt will enable us to further reduce our interest expense and improve our balance sheet. In addition, after the end of the third quarter, we paid off the remaining $5 million of revolver debt we had outstanding.

我們很高興能夠大幅提前還清定期貸款債務，並預計消除這筆債務將使我們能夠進一步減少利息支出並改善我們的資產負債表。此外，第三季末後，我們還清了剩餘的 500 萬美元未償循環債務。

The company's effective tax rate for 2023 and future periods will reflect a statutory tax rate of approximately 26.1%, excluding certain temporary and permanent tax adjustments. While the 9 months ended September 30, 2022 period reflected an effective tax rate of 11.9% due to the release of the company's valuation allowance at that time.

該公司2023年及未來期間的有效稅率將反映約26.1%的法定稅率，不包括某些臨時和永久的稅收調整。截至2022年9月30日止的9個月期間，由於當時釋放了公司的估值備抵，實際稅率為11.9%。

During the 3 months ended September 30, 2023, the company generated $21.9 million of cash flow from operations compared to $26.1 million during the 3 months ended September 30, 2022. The stockholders' equity improved to $225 million at September 30, 2023, as compared to $175 million at December 31, 2022.

截至2023年9月30日止的三個月內，該公司的營運現金流為2,190萬美元，而截至2022年9月30日止的三個月內為2,610萬美元。截至2023年9月30日，股東權益改善至2.25億美元，而截至2022年9月30日止的三個月內，公司的股東權益增加至2.25億美元。截至 2022 年 12 月 31 日，增至 1.75 億美元。

The company's availability, consisting of cash and revolver availability at September 30, 2023, was $71 million. As we continue to generate additional cash flow in 2023, we expect to: one, ensure we have adequate inventory on hand; and two, consider other opportunities as they arise.

截至 2023 年 9 月 30 日，該公司的可用資金（包括現金和左輪手槍）為 7,100 萬美元。隨著我們在 2023 年繼續產生額外的現金流，我們預計：第一，確保我們手頭上有足夠的庫存；第二，考慮其他出現的機會。

We have strong liquidity and our revolving loan credit facility provides us with a solid financial platform and flexibility as we look forward.

我們擁有強大的流動性，循環貸款信貸便利為我們的未來提供了堅實的金融平台和靈活性。

I will now turn the call back over to Brian.

我現在將把電話轉回給布萊恩。

Thank you, Nat. Our third quarter performance provided a solid close to the 2023 cooling season. As I said earlier, we believe the unprecedented 40% step-down in the HFC baseline production and consumption allowances represents a tremendous opportunity for our company and its reclaim capabilities to bridge the anticipated gap of the HFC supply and demand.

謝謝你，納特。我們的第三季業績為 2023 年降溫季提供了堅實的基礎。正如我之前所說，我們相信，HFC 基準生產和消費配額史無前例地下降 40%，這對我們公司及其回收能力來說是一個巨大的機會，可以彌補 HFC 供需的預期缺口。

We remain focused on our commitment to providing the sustainable products and services, which will allow safe and efficient cooling and refrigeration utilizing more environmentally friendly alternatives.

我們仍然專注於提供永續產品和服務的承諾，這將利用更環保的替代品來實現安全、高效的冷卻和冷卻。

Operator, we'll now open the call to questions.

接線員，我們現在開始提問。

(Operator Instructions) Our first question comes from Gerry Sweeney with ROTH Capital.

（操作員說明）我們的第一個問題來自羅斯資本的 Gerry Sweeney。

Could you talk a little bit about the HFC reclaim activity at Hudson as well as potential opportunities to increase just overall reclaim industry, reclaim activity vis-a-vis the EPA rulings that are being worked out?

您能否談談哈德遜的 HFC 回收活動，以及根據正在製定的 EPA 裁決增加整體回收業、回收活動的潛在機會？

So we typically report our annual reclaim numbers at the end of the year. And the reason we've done that historically, while the refrigerant sales typically wind down in Q4, our recovery comes in pretty strong all the way through -- our refrigerant sales wind down in the Q3. The recovery and reclamation activity continues through most of Q4.

因此，我們通常會在年底報告年度回收數據。我們歷史上這樣做的原因是，雖然冷媒銷售通常在第四季度減少，但我們的復甦一直相當強勁——我們的冷媒銷售在第三季減少。恢復和填海活動持續到第四季的大部分時間。

Part of it is the accumulation of refrigerants held by contractors, but we're now entering that season where larger systems are being turned down and retrofits and conversions occur. So we'll be reporting on that at the end of the year. But so far, it's been a strong reclaim year.

部分原因是承包商持有的冷媒不斷積累，但我們現在正進入大型系統被關閉並進行改造和轉換的季節。因此，我們將在今年年底對此進行報告。但到目前為止，這是強勁的復甦年。

Moving to the other part of your question and the refrigerant management rule, the EPA is really taking a significant move to mandate the use of reclamation both at the OEM level and at the servicing level. And the anticipated demand in the future depending on the type of refrigerant and the CO2 equivalent is certainly, in some instances, as low as maybe a 6x growth from where we are today to possibly as high as a 10 full growth where we are today.

轉到您問題的另一部分和冷媒管理規則，美國環保署確實採取了重大舉措，強制要求在 OEM 級別和維修級別使用回收。在某些情況下，根據冷媒類型和二氧化碳當量，未來的預期需求肯定會低至目前的 6 倍增長，也可能高達目前的 10 倍。

Particularly what we think will be interesting to see is how allowance holders will treat higher GWP refrigerants like 404A or possibly 410A and whether they'd be willing to continue to produce them. And whether or not that then becomes an opportunity for the higher GWP gases to really be served 100% with reclaim refrigerants.

我們認為特別值得關注的是配額持有者將如何處理 GWP 較高的冷媒，例如 404A 或可能的 410A，以及他們是否願意繼續生產它們。以及這是否會成為高 GWP 氣體真正 100% 使用回收冷媒的機會。

These kinds of things we don't really know today how all of this will progress. But likely, we'll see trends occurring throughout 2024 and into 2025 about how folks will think about higher GWP refrigerants versus lower GWP HFC refrigerants.

這些事情我們今天並不真正知道這一切將如何進展。但我們很可能會看到 2024 年到 2025 年人們將如何看待 GWP 較高的冷媒與 GWP 較低的 HFC 冷媒的趨勢。

So I -- hopefully, I answered your question, Gerry.

所以我——希望我回答了你的問題，格里。

Yes. And just on the higher GWP refrigerants, correct me if I'm wrong, but the 404A, it's a higher impact to the environment. So it uses up more allowances. So that's from a, say, economical point of view, producers would want to produce less of that and more of a lower GWP gas so they can produce a higher volume of that. Is that correct? If I curated it correctly or clearly?

是的。就 GWP 較高的冷媒而言，如果我錯了，請糾正我，但 404A 對環境的影響更大。所以它消耗了更多的津貼。因此，從經濟角度來看，生產商希望減少生產，生產更多全球升溫潛勢值較低的天然氣，這樣他們就可以生產更多的天然氣。那是對的嗎？我是否正確或清楚地策劃了它？

Yes. No, I think you're exactly right. So to be specific, 404A is like 4,000:1. 134A is closer to 1,000. A refrigerant that's likely going to get a foothold over the next 5 years is R-32, and that's about 675.

是的。不，我認為你是完全正確的。具體來說，404A 相當於 4,000:1。 134A接近1,000。 R-32 是一種可能在未來 5 年內佔據一席之地的冷媒，約為 675。

So say in another way to what you just described, if you're going to make, let's say, 134A, you could probably make close to 4 pounds compared to 1 pound of 404A. So should 404A be priced at 4x 134A as an example or just not make it at all?

因此，換句話說，如果您要生產 134A，那麼與 1 磅的 404A 相比，您可能可以生產接近 4 磅的重量。那麼，404A 的定價是否應該以 4x 134A 為例，還是乾脆不做呢？

And these are things we just don't know yet. As I just said a moment ago, we'll start to see trends in 2024. And then certainly, by '25, we'll have a better understanding how people will think about things.

這些都是我們還不知道的事。正如我剛才所說，我們將在 2024 年開始看到趨勢。當然，到 25 年，我們將更了解人們如何看待事物。

And to go back, this is why this particular phaseout has many differences compared to the ODS phase-outs. One particular difference here is even with a 40% reduction in the HFC consumption allowances for next year, all new equipment, for the most part, will be HFC-based being installed. Whereas with '22, the equipment was phased out 10 years before the refrigerant was. So there's a lot of differences there. But again, the big difference here, it's not a refrigerant phase out, it's a CO2e phaseout.

回過頭來說，這就是為什麼這次特定的淘汰與消耗臭氧層物質的淘汰相比有很多不同之處。其中一個特別的差異是，即使明年的 HFC 消耗配額減少 40%，所有新設備大部分都將安裝基於 HFC 的設備。而在 22 年，該設備比冷媒早 10 年被淘汰。所以那裡有很多差異。但同樣，這裡的最大差異是，這不是冷媒的逐步淘汰，而是二氧化碳的逐步淘汰。

Got it. Second kind of question, gross margin is 40% above your long-term goal of 35%. And I do see prices down in terms of refrigerant prices down. So you would assume -- if you're collecting gas and paying 50% of the price, you would assume somewhat of a lower gross margin depending on the inventory roles.

知道了。第二類問題，毛利率比你的長期目標35%高出40%。我確實看到冷媒價格下降。所以你會假設——如果你收集天然氣並支付 50% 的價格，你會假設毛利率會較低，這取決於庫存角色。

But can you walk me through maybe the 40% gross margin, how impactful with the carbon credit sales and DLA project versus I guess some of the other gas sales? So we get a little bit clearer picture of what's going on there.

但你能否向我介紹一下 40% 的毛利率，碳信用額銷售和 DLA 項目與我猜其他一些天然氣銷售相比的影響有多大？這樣我們就可以更清楚地了解那裡正在發生的事情。

Well, as we said, without those 2 groups that of sales, gross margins would have probably been closer to 38%. DLA right now, we're seeing a tremendous amount of activity, much more so than we've ever seen before. This is now the second quarter that we reported their revenues are up and we're likely headed towards a record annual revenue volume with the DLA, which we'll report at year-end.

嗯，正如我們所說，如果沒有這兩組銷售額，毛利率可能會接近 38%。 DLA 現在，我們看到了大量的活動，比我們以前見過的要多得多。這是我們報告其收入成長的第二個季度，我們很可能會與 DLA 實現創紀錄的年度收入，我們將在年底報告這一情況。

Carbon sales just kind of come and go. They're not overly material, but because the offset market has been pretty strong in terms of pricing, the margins on that transaction when you complete them, which could take some time, could be higher than what they might have been historically.

碳銷售只是來來去去。它們並不是太重要，但由於抵消市場在定價方面相當強勁，因此當您完成交易時（這可能需要一些時間）交易的利潤可能會高於歷史水平。

So at some point, we're not sure how our inventory cost will compare to pricing. But if there was a stable pricing environment, then our costing should increase relative to the sale price, which then should take us to something closer to an overall blended 35% gross margin.

因此，在某些時候，我們不確定我們的庫存成本與定價相比如何。但如果有一個穩定的定價環境，那麼我們的成本計算相對於銷售價格應該會增加，這將使我們的整體混合毛利率更接近 35%。

If we see price increases like we saw with 2022, then we could do much better on the gross margin level. And then certainly, if we see the growth in reclamation as anticipated in the refrigerant management rule from the EPA, then our mix would change and then we would have higher or more volume of refrigerants that we reclaim versus distributing product we bought from a producer. And the margins on reclaim typically are closer to 50%, which would help improve that overall blend.

如果我們看到像 2022 年那樣的價格上漲，那麼我們可以在毛利率水準上做得更好。當然，如果我們看到美國環保署冷媒管理規則中預期的回收量成長，那麼我們的組合就會發生變化，然後我們會回收更多或更多數量的冷媒，而不是分銷從生產商那裡購買的產品。回收利潤通常接近 50%，這將有助於改善整體混合。

The next question comes from Ryan Sigdahl from Craig-Hallum Capital.

下一個問題來自 Craig-Hallum Capital 的 Ryan Sigdahl。

Curious, the decline in refrigerant pricing, I think is down a little bit sequentially as well. But can you talk through what you're seeing in the industry and what you think drove that as we get closer to 2024? A little surprised when we saw it drift a little lower kind of at the tail end of the season here.

奇怪的是，冷媒價格的下降，我認為也連續下降了一點。但隨著 2024 年的臨近，您能否談談您在行業中看到的情況以及您認為是什麼推動了這一趨勢？當我們看到它在賽季末稍微降低一點時，我們感到有點驚訝。

Yes. So we think as it relates starting back to Q3 of last year, like the very tail end, let's say, the month of September, we saw prices starting to come down. And possibly that allowance holders overestimated what demand might be in the second half of the year relative to the first half of the year. And they may have found that they had extra allowances, they start to lower the price.

是的。因此，我們認為，從去年第三季開始，就像最後一樣，比如說九月份，我們看到價格開始下降。與上半年相比，配額持有者可能高估了下半年的需求量。他們可能發現他們有額外的津貼，他們開始降低價格。

We think that philosophy for the allowance holders continued into the beginning of the 2023 year. And unfortunately, Q1's weather was not as warm as Q1's weather 2022. So if you're in a situation where you need to sell, you're likely going to be forced to sell at a lower price.

我們認為津貼持有者的這一理念一直持續到 2023 年初。不幸的是，第一季的天氣不像 2022 年第一季的天氣那麼溫暖。因此，如果您處於需要出售的情況，您可能會被迫以較低的價格出售。

And we saw the lower pricing condition continue pretty much through most of the 9-months season, going from somewhere above $10 a pound to probably a low of about $8 a pound in general for HFCs. Recently, we've seen a little rebounding in HFC pricing as we exited Q3 starting into Q4.

我們發現，在 9 個月的銷售季的大部分時間裡，較低的價格狀況持續存在，一般 HFC 的價格從每磅 10 美元以上降至每磅 8 美元左右的低點。最近，隨著我們從第三季度進入第四季度，我們看到 HFC 定價略有反彈。

We feel pretty good about where the pricing is at the moment. It's headed towards -- back towards that $10 a pound, it looks like price that we sort of started the year at. And so we just think next year is going to be a whole new year to start over in some respects.

我們對目前的定價感覺很好。它正在朝著——回到每磅 10 美元的方向發展，看起來就像是我們今年年初的價格。因此，我們認為明年將是在某些方面重新開始的全新的一年。

Most of the customers that buy refrigerant are not going to buy until, let's say, March of next year, April of next year once they get as a heating equipment and start to get into the cooling equipment. And likely the overall psychological impact of a 40% reduction will somehow be reflected in pricing starting in Q1 of 2024.

大多數購買冷媒的客戶，等到明年三月、明年四月，一旦他們開始作為暖氣設備進入冷凍設備時，才會購買。降價 40% 的整體心理影響可能會以某種方式反映在 2024 年第一季開始的定價中。

With the price headwinds this year, you're still putting up surprising upside to the margins. I guess keep talking at 35% or a little better. But without those price headwinds, I would think you would have been even better in the quarter. So I guess, can you talk through structural margins in the business, in the industry? You mentioned the onetimers, but even at 38%, that's solidly better with those price headwinds. So any extra color on the margin?

儘管今年面臨價格逆風，但您的利潤率仍有令人驚訝的上升空間。我想繼續以 35% 或更好的速度說話。但如果沒有這些價格阻力，我認為您在本季的表現會更好。所以我想，你能談談業務、產業的結構性利潤嗎？您提到了一次性者，但即使是 38%，在價格逆風的影響下，這也明顯更好。那麼邊緣有多餘的顏色嗎？

Again, I think we have done a pretty good job. Going back a few years, we started the initiative of trying to create more of a value proposition with not all customers, not all buyers of refrigerant because many buyers of refrigerant are just looking for cheap price. But we focused on working with customers that had the opportunity to support recovery and reclamation, to support the principles we have around life cycle refrigerant management.

再說一次，我認為我們做得很好。回到幾年前，我們開始嘗試為並非所有客戶、並非所有冷媒買家創造更多價值主張，因為許多冷媒買家只是尋求便宜的價格。但我們專注於與有機會支持回收和再利用的客戶合作，支持我們圍繞生命週期冷媒管理的原則。

And as a result, I think the strength of the relationship helps in some respects relative to other customers who are just focused on price. And we think that's going to be important as we enter 2024, I think, and sort of I can't say that this is true but I think that those folks that were focused on price are going to have a hard time getting access to supply next year. We're certainly having a hard time to buy in a manner by which they previously did so.

因此，我認為相對於其他只關注價格的客戶，這種關係的強度在某些方面有所幫助。我們認為，隨著我們進入 2024 年，這將變得很重要，我認為，我不能說這是真的，但我認為那些關注價格的人將很難獲得供應明年。我們肯定很難像他們以前那樣購買。

So we're happy with our customer base. We try to grow the customer base. We try to introduce reclamation and recovery programs to customers. We spent a lot of time this year going downstream to contractors to help educate them on the importance of recovery, to give them best practices, to help speed up the recovery once they have that opportunity. So we feel pretty good. I mean, really good, I guess, about our relationship with our customers and our ability to translate that into value and profitability.

所以我們對我們的客戶群感到滿意。我們努力擴大客戶群。我們嘗試向客戶介紹回收和恢復計劃。今年我們花了很多時間深入下游承包商，幫助他們了解恢復的重要性，為他們提供最佳實踐，一旦有機會就幫助他們加快恢復速度。所以我們感覺很好。我的意思是，我想，我們與客戶的關係以及我們將其轉化為價值和盈利能力的能力非常好。

Good. Then just switching over to the carbon credit opportunity. We're hearing more excitement in the industry around that opportunity. Any quantitative metrics you can share about growth in your carbon credits and how you think about the opportunity over the next few years?

好的。然後就轉向碳信用機會。我們聽到業界對這個機會更加興奮。您可以分享任何有關碳信用額成長的量化指標以及您如何看待未來幾年的機會嗎？

We actually don't necessarily think the carbon markets have a growth opportunity for Hudson. We're currently participating in 2 types of markets. One is a mandatory market relative to the State of California. But the protocol that is related to refrigerants is solely attributable to the destruction of CFCs. And as you know, CFCs and CFC equipment haven't been installed or manufactured since 1994. We just feel that, that protocol and the availability of CFCs are sunsetting. And so to the extent that there are no more CFC systems at some point, then the protocol really will have no material value.

我們其實不一定認為碳市場對哈德遜有成長機會。我們目前參與兩種類型的市場。一是相對於加州的強制性市場。但與冷媒相關的議定書僅歸因於氟氯化碳的銷毀。如你所知，自 1994 年以來，CFC 和 CFC 設備尚未安裝或製造。我們只是覺得該協議和 CFC 的可用性正在逐漸消失。因此，如果在某個時候不再有 CFC 系統，那麼協議就真的沒有任何物質價值。

On a voluntary basis, currently, there is a protocol that supports reclamation of HFCs. But because it's voluntary, it likely is going to go away when the mandate for uses of reclaim refrigerants are put in place because then it's not really a voluntary process. It's a mandated process. And typically, when that's the case, the voluntary protocol goes away.

目前，在自願的基礎上，有一項支持氫氟碳化合物回收的協議。但由於它是自願的，因此當使用回收冷媒的強制規定到位時，它可能會消失，因為那時它就不是一個真正的自願過程。這是一個強制性的過程。通常，在這種情況下，自願協議就會消失。

So we don't know what will happen with these different protocols but the ones that we currently operate in likely will diminish or possibly go away in time. Alternatively, new protocols could be established and then there could be a new opportunity if and when they were established.

因此，我們不知道這些不同的協定會發生什麼，但我們目前使用的協定可能會隨著時間的推移而減少或消失。或者，可以建立新的協議，一旦建立，就可能有新的機會。

Next question comes from Austin Moeller with Canaccord.

下一個問題來自 Canaccord 的 Austin Moeller。

So just a question here. Do you expect that the contractors in the HVAC industry are adequately prepared to increase the amount of reclamation that's being -- that's going on in the number of cylinders being sent to reclaimers by the second or third quarter of next year? Or do you think that it could potentially be quite chaotic just given the 40% virgin production cap?

所以這裡只是一個問題。您是否預計暖通空調行業的承包商已做好充分準備，在明年第二或第三季之前增加目前發送給回收商的鋼瓶數量？或者您是否認為，鑑於 40% 的原始產量上限，情況可能會相當混亂？

Historically, participants in our industry are less prepared than we would think they should be, and likely that's the case for next year. However, what we have been doing, particularly for this calendar year and probably started at the second half of last year, is trying to create more awareness and participate at educational seminars and training seminars geared for contractors. So I think the folks that we've been able to touch and reach and speak to and folks that listen to the playback and things like that should be prepared.

從歷史上看，我們行業的參與者的準備程度比我們想像的要少，明年的情況可能也是如此。然而，我們一直在做的事情，特別是今年，可能從去年下半年開始，正在努力提高人們的認識並參與針對承包商的教育研討會和培訓研討會。因此，我認為我們能夠接觸、接觸和交談的人們以及收聽回放和類似內容的人們應該做好準備。

You raised a good question, cylinders and access to cylinders. There may be some reclaimers that will have difficulties getting access to cylinders and supporting greater recoveries. We already use a pretty substantial reusable fleet, which recovery cylinders are reusable steel as opposed to disposable. And so while we can't say that there won't be some shortages on cylinders next year, particularly if there's a significant growth in reclamation, I think our position with cylinders and availability of access to getting cylinders possibly would be better than most others in the reclamation industry.

你提出了一個很好的問題，氣瓶和氣瓶的使用。一些回收商可能難以接近鋼瓶並支援更大的回收率。我們已經使用了相當多的可重複使用的車隊，這些回收鋼瓶是可重複使用的鋼製而不是一次性的。因此，雖然我們不能說明年不會出現鋼瓶短缺的情況，特別是如果回收量顯著增長，但我認為我們在鋼瓶方面的地位以及獲取鋼瓶的可用性可能會比大多數其他國家更好在回收行業中。

And do you expect that your current number of laboratories in your footprint is sufficient to meet the uptick in reclamation? I know you talked about adding shifts.

您預計目前您所在地區的實驗室數量足以滿足填海量的成長嗎？我知道你談到了增加輪班。

You're correct. We're still waiting for the '22 data should be out very shortly. But as it goes back to the '21 data, if you look at the totality of the reclaim pounds, '21 was lower than some of the peak years by a few million pounds industry-wide.

你是對的。我們仍在等待 22 年的數據，應該很快就會出來。但回到 21 年的數據，如果你看一下回收磅數的總量，你會發現 21 年全行業的回收量比一些高峰年份低了幾百萬磅。

So today, let's say, reclaimers on average are probably reclaiming fewer pounds than what was the peak period. But even back to the peak period, the EPAs done studies on our industry that would have said that there was enough capacity to more than triple the volume. We've always talked about we could always go to a second shift if we needed on reclaim capacity.

因此，假設今天回收商平均回收的重量可能比高峰時期少。但即使回到高峰時期，美國環保署對我們的產業進行了研究，結果顯示我們的產能足以使產量增加三倍以上。我們一直在談論，如果我們需要回收能力，我們總是可以進行第二輪班。

We've been investing each and every year on more lean production processes, but also automation, particularly around the handling of cylinders. So that when a cylinder comes in the door within 2 business days, a cylinder goes out. And a lot of the automation that we're adding would correlate to how the propane industry evolved in the mid- to late 90s with the general swap programs that you see today and how to refurbish and move steel through a plant to their fill lines and so forth.

我們每年都在更精實的生產流程和自動化方面進行投資，特別是在氣瓶處理方面。這樣，當 2 個工作天內有鋼瓶進來時，就會有鋼瓶出去。我們添加的許多自動化功能與丙烷行業在 20 世紀 90 年代中後期的發展方式以及您今天看到的通用交換計劃以及如何翻新和將鋼材通過工廠移動到填充線以及如何進行相關。等等。

So we spend a lot of time and energy. We think we'll be able to meet any growth in capacity. We certainly do expect to have additional CapEx dollars. But typically, our CapEx is $5 million annually or less. And likely that kind of trend, I would expect to continue, unless there was something meaningful in the change of what we decide to do.

所以我們花了大量的時間和精力。我們認為我們將能夠滿足產能的任何成長。我們當然希望有額外的資本支出。但通常情況下，我們的資本支出每年不超過 500 萬美元。我預期這種趨勢可能會持續下去，除非我們決定要做的事情發生了有意義的改變。

We have reached the end of the question-and-answer session. I will now turn the call over to management for closing remarks.

我們的問答環節已經結束。我現在將把電話轉交給管理階層進行總結發言。

Thank you, operator. I'd like to thank our employees for their continued support and dedication to our business. I want to again thank our long-time shareholders and those that recently joined us for their support. We look forward to speaking with you after the first -- after the fourth quarter results, and have a good night, everybody. Thank you.

謝謝你，接線生。我要感謝我們的員工對我們業務的持續支持和奉獻。我想再次感謝我們的長期股東和最近加入我們的股東的支持。我們期待在第一季 - 第四季結果之後與您交談，祝大家度過一個美好的夜晚。謝謝。

This concludes today's conference, and you may disconnect your lines at this time. Thank you for your participation.

今天的會議到此結束，此時您可以掛斷電話了。感謝您的參與。