Hudson Technologies Inc (HDSN) 2024 Q2 法說會逐字稿

Greetings. Welcome to the Hudson Technologies second quarter 2024 earnings call. (Operator Instructions) Please note this conference is being recorded. I will now turn the conference over to your host, Jen Belodeau. You may begin.

問候。歡迎參加 Hudson Technologies 2024 年第二季財報電話會議。（操作員說明）請注意，本次會議正在錄製中。現在我將會議交給主持人 Jen Belodeau。你可以開始了。

Thank you. Good evening, and welcome to our conference call to discuss Hudson Technologies' financial results for second quarter 2024. On the call today are Brian Coleman, President and Chief Executive Officer; and Brian Bertaux, Hudson's new Chief Financial Officer.

謝謝。晚上好，歡迎參加我們的電話會議，討論 Hudson Technologies 2024 年第二季的財務表現。今天參加電話會議的是總裁兼執行長布萊恩‧科爾曼 (Brian Coleman)；以及 Hudson 新任財務長 Brian Bertaux。

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, our best view of industry and of our businesses as we see them today, they're 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、意見或預測的聲明均為前瞻性聲明。儘管它們反映了我們當前的期望、我們對行業和業務的最佳看法，但它們並不能保證未來的表現。

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 you to consider and interpret them.

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，因此我們要求您考慮並解釋它們。

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

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。不過，我會把電話轉給布萊恩科爾曼。繼續吧，布萊恩。

Good evening, and thank you for joining us. So far, 2024 has a number of long-term positive events such as the significant cash flow generation, the anticipated share buyback, the acquisition of USA Refrigerants and the expected final Refrigerant Management Rule, creating the first ever federal mandates for the use of reclaimed refrigerant.

晚上好，感謝您加入我們。So far, 2024 has a number of long-term positive events such as the significant cash flow generation, the anticipated share buyback, the acquisition of USA Refrigerants and the expected final Refrigerant Management Rule, creating the first ever federal mandates for the use of reclaimed冷媒.

Unfortunately, on a short-term basis, we've seen downward pricing pressure this sales season. As we move through the 2024 selling season, the landscape has been challenging. In the second quarter, demand for refrigerants were very strong with a 17% increase in volume over last year. However, we continue to experience pricing pressure for certain refrigerants, which negatively impacted our revenue and margin performance and outweighing the volume gains.

不幸的是，從短期來看，我們在這個銷售季節看到了價格下行的壓力。隨著 2024 年銷售旺季的到來，情況充滿挑戰。第二季度，冷媒的需求非常強勁，銷量比去年同期成長了 17%。然而，我們仍然面臨某些冷媒的定價壓力，這對我們的收入和利潤率表現產生了負面影響，並且超過了銷售成長。

During the second quarter, our industry saw an approximate 25% decline in the price of certain refrigerants as compared to the second quarter of 2023 and HFC pricing has decreased by about approximately 6% from the level we discussed when we last spoke on May 1, with pricing levels at about $7.50 per pound today.

與 2023 年第二季度相比，第二季度，我們行業中某些冷媒的價格下降了約 25%，HFC 定價較我們 5 月 1 日上次發言時討論的水平下降了約 6%，今天的價格水準約為每磅7.50 美元。

Given the challenging pricing environment, our margin performance was below our long-term target. However, we delivered solid profitability. With our visibility today, if current pricing levels continue through the remainder of 2024 selling season, we would anticipate full-year revenue in the range of approximately $240 million to $250 million with full-year gross margins of approximately 30%.

鑑於充滿挑戰的定價環境，我們的利潤率表現低於我們的長期目標。然而，我們實現了穩健的獲利能力。以我們今天的可見度，如果目前的定價水準持續到 2024 年銷售季的剩餘時間，我們預計全年收入約為 2.4 億至 2.5 億美元，全年毛利率約為 30%。

As we outlined last quarter, we anticipated that pricing levels might not rebound as the season progressed. And we noted that last year's strong DLA program specific order activity of approximately $20 million would likely not be repeated creating a difficult comparison for this year. While the current pricing situation is disappointing, we've been in the industry a very long time and we believe this pricing dynamic is temporary and does not impact our long-term view of Hudson's growth opportunity.

正如我們上季度概述的那樣，我們預計價格水平可能不會隨著季節的進展而反彈。我們注意到，去年大約 2000 萬美元的 DLA 計劃特定訂單活動很可能不會重複，這給今年帶來了困難。雖然目前的定價情況令人失望，但我們已經進入該行業很長一段時間了，我們相信這種定價動態是暫時的，不會影響我們對哈德遜成長機會的長期看法。

As always, we remain focused on the elements of our business that we can control, including our commitment to ensuring that we are meeting the refrigerant needs of our customers and promoting recovery and reclamation as we help bridge the transition underway through current and future refrigerant phase downs.

一如既往，我們仍然專注於我們可以控制的業務要素，包括我們致力於確保滿足客戶的冷媒需求並促進回收和再利用，幫助彌合當前和未來冷媒階段正在進行的過渡起伏。

During the quarter, we announced our acquisition of USA Refrigerants, a leading purchaser of recovery refrigerants known for their strong sales organization and expertise in sourcing recovered refrigerant.

本季度，我們宣布收購 USA Refrigerants，這是一家領先的回收冷媒採購商，以其強大的銷售組織和採購回收冷媒方面的專業知識而聞名。

Historically, USA generated average revenues of approximately $20 million per year. The skill set and relationship the USA team brings, combined with the Hudson's existing customer base are expected to significantly scale our capabilities around recovery and reclamation. This will allow us to significantly enhance our ability to profitably leverage current and future phase downs of virgin refrigerants and the resulting supply demand imbalance.

從歷史上看，美國每年平均收入約 2000 萬美元。美國團隊帶來的技能和關係，再加上哈德遜現有的客戶群，預計將顯著擴大我們在恢復和填海方面的能力。這將使我們能夠顯著增強我們利用當前和未來的原始冷媒逐步減少以及由此產生的供需失衡來獲利的能力。

With the addition of the USA team, Hudson has created a dedicated refrigerant acquisition group focused on acquiring all types of refrigerants from CFCs to HFCs as well as to the latest generation products and we're very excited about the potential contribution of this new group.

隨著美國團隊的加入，哈德森創建了一個專門的冷媒採購小組，專注於採購從 CFC 到 HFC 的所有類型冷媒以及最新一代產品，我們對這個新小組的潛在貢獻感到非常興奮。

In the month of June, we on boarded and integrated this business with ours and have set the strategic plan in motion, so that in July and the balance of the year, we should see the benefits of the growth opportunity we expected to achieve as a result of this acquisition, and we welcome the USA team to the Hudson team.

在 6 月份，我們啟動了這項業務並將其與我們的業務整合在一起，並製定了戰略計劃，以便在 7 月份和今年的剩餘時間裡，我們應該看到我們預期實現的成長機會的好處這次收購的結果，我們歡迎美國隊加入哈德遜隊。

And as a reminder, as we grow our volumes of reclaimed refrigerant and then when sold, we typically recognize double the gross margins than when we buy and sell newly manufactured refrigerants. Additionally, when we source more recovered refrigerants, we become more self-reliant on the supply side of our inventory needs.

提醒一下，當我們增加回收冷媒的數量並在出售時，我們通常會發現毛利率是購買和銷售新製造的冷媒時的兩倍。此外，當我們採購更多回收冷媒時，我們在庫存需求的供應方面變得更加自立。

As we move towards the completion of our nine-month selling season, we will gain better visibility related to the current HFC phase down and where the industry stands in terms of the anticipated supply demand imbalance.

隨著我們為期九個月的銷售季節即將結束，我們將更了解目前 HFC 的逐步淘汰以及業界在預期供需失衡方面的狀況。

We also expect to see the EPA's proposed Refrigerant Management Rule finalized this month, which is an important component of the implementation of certain aspects of the AIM Act. As a reminder, the proposed EPA rule mandates the use of reclaimed refrigerants for certain applications and equipment.

我們也預計 EPA 擬議的冷媒管理規則將於本月最終確定，這是實施 AIM 法案某些方面的重要組成部分。提醒一下，擬議的 EPA 規則強制要求在某些應用和設備中使用回收冷媒。

If the proposed rule is adopted as final, this will be the first time in our industry's history that we have a federal requirement for the mandatory use of reclaimed refrigerants in certain sectors. Additionally, many states have proposals under consideration that would mandate the use of reclaimed refrigerants and certain first mover states have already adopted legislation.

如果擬議規則被最終採用，這將是我們行業歷史上第一次聯邦要求在某些行業強制使用回收冷媒。此外，許多州正在考慮強制使用回收冷媒的提案，並且某些先行州已經通過了立法。

California for example, will implement a mandate for the use of reclaimed refrigerants in state governed facilities beginning in 2025. Furthermore, the EPA's Technology Transition Rule, which was finalized in October 2023, promotes the introduction of lower GWP systems for new construction starting in 2025, as well as a conversion of the current estimated installed base of 125 million HFC and legacy systems over the next 20 years.

例如，加州將從 2025 年開始強制要求在州管理設施中使用回收冷媒。此外，EPA 的技術轉型規則於2023 年10 月最終確定，鼓勵從2025 年開始在新建工程中採用較低GWP 的系統，並在未來幾年內對目前估計安裝的1.25 億個HFC 和遺留系統進行改造。

Hudson can provide any and all types of refrigerant and service any and all types of systems. So we are well equipped to support the move to next generation refrigerants and technology. We're optimistic about the legislative environment as it relates to the industry compliance and our ability to assist existing and new customers.

哈德森可以提供任何和所有類型的冷媒，並為任何和所有類型的系統提供服務。因此，我們有能力支持向下一代冷媒和技術的轉變。我們對立法環境持樂觀態度，因為它關係到行業合規性以及我們協助現有和新客戶的能力。

Additionally, we are an industry leader in our efforts to support the transition to more effective refrigerant management and environmentally friendly cooling equipment. We are of course a huge proponent for the importance of refrigerant recovery because beyond the negative environmental impact of venting, it is also a fact that without recovered gas, you will have no refrigerant source for producing reclaimed refrigerant.

此外，我們在支持向更有效的冷媒管理和環保冷卻設備過渡方面處於行業領先地位。當然，我們大力支持冷媒回收的重要性，因為除了排放對環境的負面影響之外，事實上，如果沒有回收的氣體，您將沒有冷媒來源來生產回收的冷媒。

During the second quarter, we attended and presented at various industry conferences to discuss the importance of recovering refrigerant during service calls and the environmental benefits from using reclaimed refrigerant.

在第二季度，我們出席並出席了各種行業會議，討論在服務電話中回收冷媒的重要性以及使用回收冷媒的環境效益。

We've been at the Data Center World, Service Nation Summits, Linux Vision Techs, 7/24 Exchange and International District Energy. Hudson is widely regarded as an industry thought leader and we're pleased to be actively working to assist the transition as our customers comply with the new regulatory environment.

我們參加過資料中心世界、服務國家高峰會、Linux Vision Techs、7/24 Exchange 和國際區域能源會議。Hudson 被廣泛認為是行業思想領袖，我們很高興能夠積極努力協助我們的客戶遵守新的監管環境，實現轉型。

Previously noted the three pillars of our capital allocation strategy are, business working capital needs, acquisitions and share repurchases. Based on the 2024 Wells Fargo amendment, coupled with the recent approval of a share repurchase program of up to $10 million by the company's Board of Directors, we expect to initiate a share repurchase plan in the coming weeks.

先前指出，我們資本配置策略的三大支柱是業務營運資本需求、收購和股票回購。根據2024年富國銀行修正案，加上公司董事會最近批准的高達1000萬美元的股票回購計劃，我們預計將在未來幾週內啟動股票回購計劃。

The timing of which will be based on the plan administrator and the legal guidance. We are committed to strategically deploying capital to drive long-term value for our stockholders. We believe that our compelling long term profitability combined with the strength of our balance sheet and cash flows presents an attractive buying opportunity for our stock.

其時間安排將基於計劃管理人員和法律指導。我們致力於策略性地部署資本，為股東帶來長期價值。我們相信，我們令人信服的長期獲利能力加上我們的資產負債表和現金流的實力，為我們的股票提供了有吸引力的購買機會。

The board's authorization of a share repurchase reflects their confidence in Hudson's long-term growth prospects and dedication to stockholder value creation. Given our significantly improved balance sheet over the past few years, we are now able to prioritize investing for growth organically and through acquisitions, while also potentially returning capital to our stockholders through the opportunistic repurchase of stock.

董事會授權回購股份反映了他們對哈德遜長期成長前景的信心以及對股東價值創造的奉獻精神。鑑於過去幾年我們的資產負債表顯著改善，我們現在能夠優先透過收購和有機成長進行投資，同時也有可能透過機會性股票回購將資本返還給股東。

As one of the largest individual shareholders, I take my responsibility as CEO most seriously. For those that have been longtime shareholders, hopefully you will see two things, my and our employees' dedication to ensuring the success and growth of our company in a profitable and sustainable way and enhancing shareholder value.

作為最大的個人股東之一，我非常重視身為執行長的責任。對於那些長期股東來說，希望你們能看到兩件事，我和我們的員工致力於確保我們公司以盈利和可持續的方式取得成功和發展，並提高股東價值。

All of our actions are done with that intent and I am especially proud of our employees' commitment and dedication. With that said, I'd like to introduce Brian Bertaux, who as most of you know, recently joined Hudson as CFO. Brian has public company experience through his nearly 20 years with New York Stock Exchange traded Trex, a name you might recognize if you have high quality composite decking at your homes.

我們所有的行動都是為了這個目的，我對員工的承諾和奉獻精神感到特別自豪。話雖如此，我想介紹一下 Brian Bertaux，正如你們大多數人所知，他最近加入 Hudson 擔任財務長。Brian 在紐約證券交易所交易的 Trex 擁有近 20 年的上市公司經驗，如果您家裡有高品質複合地板，您可能會認識這個名字。

We are very pleased to welcome Brian and look forward to his contributions. Let me turn it over to him. Go ahead, Brian.

我們非常高興地歡迎布萊恩並期待他的貢獻。讓我把它交給他吧。繼續吧，布萊恩。

Thank you, Brian and good evening everybody. I'm on day seven as CFO at Hudson Technologies and I'm impressed with what I've seen and learned thus far. I am thrilled to have the opportunity to join this accomplished leadership team and contribute to the company's long-term success.

謝謝你，布萊恩，大家晚上好。這是我擔任 Hudson Technologies 財務長的第七天，迄今為止所見所聞給我留下了深刻的印象。我很高興有機會加入這個優秀的領導團隊，為公司的長期成功做出貢獻。

As Brian mentioned, I previously spent 20 years at Trex company, the world's leading manufacturer of wood alternative decking and railing. During my tenure at Trex, revenue grew 9 fold from $100 million to $900 million and market cap reached $10 billion. I served in a number of senior management roles culminating as Interim President of Trex Commercial Products, a commercial railing product subsidiary purchased by Trex.

正如 Brian 所提到的，我之前在 Trex 公司工作了 20 年，該公司是世界領先的木質替代地板和欄桿製造商。在我任職 Trex 期間，營收成長了 9 倍，從 1 億美元成長到 9 億美元，市值達到 100 億美元。我曾擔任過多個高階管理職位，最後擔任 Trex Commercial Products 的臨時總裁，該公司是 Trex 收購的商業欄桿產品子公司。

While at Trex, I was instrumental in the company's capital allocation strategy and tactics which included M&A as well as opportunistic share buybacks. I'm excited to bring my broad financial and strategic leadership experience to Hudson and look forward to collaborating with the leadership team in driving operational excellence and strategic growth.

在 Trex 期間，我在公司的資本配置策略和策略中發揮了重要作用，其中包括併購以及機會性股票回購。我很高興能夠將我廣泛的財務和策略領導經驗帶到哈德遜，並期待與領導團隊合作，推動卓越營運和策略成長。

This is a very exciting time to be joining this dynamic company and industry. I look forward to the opportunity to introduce myself and get to know many of you over the coming days. Now, I'll turn to our financial review.

加入這個充滿活力的公司和行業是一個非常令人興奮的時刻。我期待在接下來的幾天裡有機會介紹自己並認識你們中的許多人。現在，我將談談我們的財務審查。

For the second quarter ended June 30, 2024, Hudson recorded revenues of $75.3 million a 17% decrease compared to revenues of $90.5 million in the comparable 2023 period. The decrease was primarily related to decreased selling prices for certain refrigerants and lower revenue from the company's DLA contract.

截至 2024 年 6 月 30 日的第二季度，Hudson 的營收為 7,530 萬美元，比 2023 年同期的營收 9,050 萬美元下降了 17%。下降的主要原因是某些冷媒的銷售價格下降以及公司 DLA 合約收入的下降。

These decreases were partially offset by volume increases in refrigerant sales of 17% when compared to the same period of 2023. Gross margin was 30% for the second quarter of 2024 as compared to 41% in the second quarter of 2023 as a result of the previously mentioned depressed year-over-year market prices.

與 2023 年同期相比，冷媒銷量成長 17%，部分抵消了這些下降。由於前面提到的年比市場價格低迷，2024 年第二季的毛利率為 30%，而 2023 年第二季的毛利率為 41%。

SG&A for the second quarter of 2024 was $9 million compared to $8.3 million in the comparable 2023 period. During the second quarter of 2024, the company incurred $700,000 of non-recurring expenses related, one, to the USA Refrigerants acquisition as well as IT projects.

2024 年第二季的銷售管理及管理費用為 900 萬美元，而 2023 年同期為 830 萬美元。2024 年第二季度，該公司產生了 70 萬美元的非經常性費用，其中之一與收購 USA Refrigerants 以及 IT 專案相關。

We recorded operating income of $12.8 million in the second quarter of 2024 compared to operating income of $27.7 million in the comparable 2023 period. The company's effective tax rate for the second quarter of 2024 was 24.2% compared to 25.3% for the second quarter of 2023.

2024 年第二季度，我們的營業收入為 1,280 萬美元，而 2023 年同期的營業收入為 2,770 萬美元。該公司2024年第二季的有效稅率為24.2%，而2023年第二季為25.3%。

The company recorded net income of $9.6 million or $0.20 per diluted share in the second quarter of 2024 compared to net income of $19.2 million or $0.41 per diluted share in the same quarter of 2023.

該公司 2024 年第二季的淨利潤為 960 萬美元，即稀釋後每股收益 0.20 美元，而 2023 年同一季度的淨利潤為 1,920 萬美元，即稀釋後每股收益 0.41 美元。

The company strengthened its balance sheet ending the period with no debt and during the first six months of this year, the company generated $38.8 million in free cash excluding the $20.7 million used to purchase USA Refrigerant, leaving $18.1 million of net free cash flow generation.

該公司在本期結束時強化了資產負債表，沒有負債，今年前六個月，公司產生了3880 萬美元的自由現金，不包括用於購買USA Refrigerant 的2070 萬美元，留下1810 萬美元的淨自由現金流。

Our $30.5 million cash position coupled with our revolving credit facility availability of $59 million sums to total liquidity of $89.5 million at June 30, 2024. This strong liquidity positions the company very well to support the operating needs of the business and pursue an opportunistic capital allocation strategy.

截至 2024 年 6 月 30 日，我們的現金部位為 3,050 萬美元，加上可用的循環信貸額度為 5,900 萬美元，流動資金總額為 8,950 萬美元。這種強大的流動性使公司能夠很好地支持業務的營運需求並奉行機會主義的資本配置策略。

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. And before we go to Q&A, I'd like to reiterate that we believe the current pricing dynamic is temporary and does not impact our long-term view for the growth of our company. We remain confident that the phasedown of HFCs will ultimately move pricing, higher, accelerate reclamation activity and drive enhanced profitability in our business.

謝謝。在進行問答之前，我想重申，我們認為目前的定價動態是暫時的，不會影響我們對公司發展的長期看法。我們仍然相信，氫氟碳化合物的逐步淘汰最終將提高價格，加速回收活動並提高我們業務的獲利能力。

We believe Hudson's leadership position in the industry, proprietary reclamation technology and long-standing customer relationships leave us well positioned to drive the necessary transition to reclaim refrigerant as Virgin supply tightens and the industry adopt new equipment and technologies.

我們相信，哈德森在行業中的領導地位、專有的回收技術和長期的客戶關係使我們能夠在維珍供應緊張以及行業採用新設備和技術的情況下推動回收製冷劑的必要過渡。

Operator will now open the call to questions.

接線員現在將開始提問。

(Operator Instructions) Ryan Sigdahl, Craig-Hallum.

（操作員說明）Ryan Sigdahl，Craig-Hallum。

Hey, good afternoon, Brian and Brian. Want to start with volume up 17% in the quarter. Can you break that down? I guess, what really drove that volume increase and was there any shift between quarters and kind of throughout the summer selling season?

嘿，下午好，布萊恩和布萊恩。希望本季銷量成長 17%。能分解一下嗎？我想，真正推動銷售成長的因素是什麼？

So, Q1, the volume was somewhat flat, when we entered this selling season, but really we had strong interest in Q2. Now, the 17% as we talked many times before may not be the blended growth relative to the entire nine-month sales season, but we do expect based on the activities we've seen in Q2 and certainly see today that we do think we're going to see growth over last year throughout the balance of the nine-month season in '24 compared to '23.

因此，當我們進入這個銷售季節時，第一季的銷售量有些持平，但實際上我們對第二季有濃厚的興趣。現在，我們之前多次談到的 17% 可能不是相對於整個九個月銷售季的混合增長，但我們確實根據我們在第二季度看到的活動以及今天看到的情況預計，我們確實認為我們與23 年相比，24 年剩餘的9 個月季節將比去年有所增長。

Good. Then US Department of Commerce, has been doing an investigation for the past year. They came out with findings and a termination in July. Basically, they're going to enforce duties on HFC blends coming in from China that are further processed in the US. Curious your thoughts on that and the potential impact to the HFC market, whether it be pricing and or just general industry dynamics over the next couple of years?

好的。然後美國商務部一年來一直在做調查。他們在七月得出了調查結果並終止了該協議。基本上，他們將對來自中國、在美國進一步加工的氫氟碳化物混合物徵收關稅。想知道您對此的想法以及對 HFC 市場的潛在影響，無論是定價還是未來幾年的一般行業動態？

So, we certainly do not like bad actors and bad behavior, and we feel certain companies that are selling refrigerant in the United States do have that propensity. With that said, we would have supported the petitioners in this ITC case ruling with regards to the circumvention findings that the ITC finally reached.

因此，我們當然不喜歡不良行為者和不良行為，我們認為某些在美國銷售冷媒的公司確實有這種傾向。話雖如此，我們將支持 ITC 案件中申請人就 ITC 最終達成的規避調查結果做出的裁決。

Bottom line is, it appears that certain entities would have attempted to bring product in from other countries claiming that the source of the refrigerant were from those companies when it appears in fact the source was from China.

最重要的是，某些實體似乎試圖從其他國家進口產品，聲稱冷媒的來源來自這些公司，而實際上來源似乎來自中國。

As a consequence, there is a claw back if you will of duties that may impose some significant financial burdens on those that may have circumvented the rules. We don't know what that impact will be. We certainly don't know when those prior tariffs payments are due, but it could have a significant impact, particularly if someone brought gas in unfairly at a cost disadvantage to those that behave and follow the rules and regulations.

因此，如果您願意的話，可能會對那些可能規避規則的人造成一些重大的經濟負擔。我們不知道這會產生什麼影響。我們當然不知道這些先前的關稅付款何時到期，但這可能會產生重大影響，特別是如果有人以不公平的方式進口天然氣，而那些遵守規則和法規的人在成本上處於劣勢。

So, it will be interesting to see what may happen over the next couple of months, but I think over the next couple of months we'll have an answer.

因此，看看接下來幾個月會發生什麼將會很有趣，但我認為在接下來的幾個月裡我們將會得到答案。

Last quick one for me. Within the revised new guidance, how much of our revenue is from USA refrigerants acquisition?

對我來說最後一個快速的。在修訂後的新指南中，我們的收入有多少來自美國冷媒收購？

I'm sorry, say that again, in terms of the balance of the year?

不好意思，再說一遍，就年度餘額而言？

Correct

正確的

Right now in the numbers that we disclosed, we would not have put much revenue in those ranges, partly to do with the focus right now for Hudson and the USA team is buying. And we're getting into that buying season relative to year-end.

目前，根據我們披露的數據，我們不會在這些範圍內投入太多收入，部分原因是哈德森和美國隊目前的重點是購買。我們正在進入相對於年底的購買季節。

Now, we're starting to see contractors accumulate gas. And, I think we've said this before that typically the returns of recovered gas tend to go about three months beyond the sales season. So, what will happen is to the extent that most of their activity are dedicated to buying refrigerant that will go into inventory for sales next year.

現在，我們開始看到承包商累積天然氣。而且，我想我們之前已經說過，回收天然氣的回報通常會比銷售季節晚三個月左右。因此，將會發生的情況是，他們的大部分活動都致力於購買明年將進入庫存銷售的冷媒。

But certainly, we do have upside to the extent that we do garner more sales over the next, particularly three months, this remainder of the selling season relative to the guidance we provided.

但當然，我們確實有上升的空間，即我們在接下來的時間內，特別是三個月，即銷售季節的剩餘時間，相對於我們提供的指導，確實獲得了更多的銷售額。

Helpful. Maybe one clarification that as we think about next year, is this just an improved mix of inventory that you'll be selling with, call it double the gross margin since reclaimed gas? Or do you think this will be incremental volume layered on to kind of current Hudson business?

有幫助。也許需要澄清一下，當我們考慮明年時，這是否只是您將用於銷售的庫存的改進組合，稱其為自回收天然氣以來毛利率的兩倍？或者您認為這將是哈德遜當前業務的增量增量？

We think it's going to be both. We sort of lost, if you will, the first two quarters of the nine months or three quarter sales season based on the closing date and then the integration. So, we definitely feel confident that we're going to get incremental revenue as well as the benefit from higher margins from selling recovered and reclaimed gas.

我們認為兩者都會。如果你願意的話，我們有點失去了基於截止日期和整合的九個月或三個季度銷售季節的前兩個季度。因此，我們絕對有信心，我們將獲得增量收入，並從銷售回收和再生天然氣中獲得更高的利潤。

Great. Thanks, guys. Good luck.

偉大的。謝謝，夥計們。祝你好運。

Thank you.

謝謝。

Gerry Sweeney, ROTH Capital.

格里·斯威​​尼，羅斯資本。

Hey Brian And Brian, How are you guys?

嘿，布萊恩和布萊恩，你們好嗎？

Doing Well Thanks

做得很好謝謝

Doing well, thanks,

做得很好，謝謝，

Just one quick question on pricing and then I'm going to go in a different direction. But, curious if pricing has changed since some of the circumvention rules or determinations have occurred?

只是一個關於定價的簡單問題，然後我將轉向不同的方向。但是，想知道自從發生一些規避規則或決定以來，定價是否發生了變化？

Again, the pricing dynamic that we described this evening is where we are today. I don't believe we've seen any material pricing changes in any way directed towards the case. We do believe certain individuals that may have imported the gas and not paid those tariffs will be subject to a fairly significant claw back and we'll have (multiple speaker) that cash implication. So, how they run their business and how they generate the cash and all that stuff, we're yet to see.

同樣，我們今晚描述的定價動態就是我們今天的情況。我認為我們沒有看到任何針對此案的重大定價變化。我們確實相信，某些可能進口天然氣但未支付關稅的個人將受到相當大的追回，我們將有（多位發言者）現金影響。因此，他們如何經營業務以及如何產生現金和所有這些東西，我們還沒有看到。

Got you. Okay, that's fair. Next question, acquisition team that you sort of highlighted with that you developed the USA Refrigerants acquisition. Can you give a little bit more detail on sort of how and the opportunity and how what they're going to do, how they do it, how they are going to drive increased reclaim activity?

明白你了。好吧，這很公平。下一個問題是，您強調了收購美國冷媒公司的團隊。您能否更詳細地介紹他們的方式、機會以及他們將要做什麼、他們如何做、他們將如何推動回收活動的增加？

So, think of the USA team and the team has been around for 20-plus years, really good dedicated folks. Think of it that they had limited access to virgin supplies. So, for them to be able to meet their customer needs, they had to be nearly 100% self-reliant on the ability to find and purchase and then process recovered refrigerants.

所以，想想美國隊，這支球隊已經存在了 20 多年，他們都是非常敬業的人。想想看，他們獲得原始物資的機會有限。因此，為了滿足客戶的需求，他們必須近乎 100% 自力更生地尋找、購買並處理回收的冷媒。

So, they're very good at hunting, very good at relationships -- relationships relative to payment and timely payment. They have a very strong reputation in the contracted community and we're expecting to bring that expertise to Hudson.

所以，他們非常擅長狩獵，非常擅長人際關係——與付款和及時付款相關的關係。他們在簽約社群中享有很高的聲譽，我們希望將這些專業知識帶到哈德遜。

And then most importantly, apply that expertise to Hudson's customer base, where we feel that we haven't done a sufficient job integrating the buying, with the selling and we think their team is really going to help us grow that opportunity as well.

最重要的是，將這些專業知識應用於哈德遜的​​客戶群，我們認為我們在整合購買和銷售方面做得還不夠，我們認為他們的團隊也確實會幫助我們增加這個機會。

Got it. And then, third and final question, obviously I am a fan of buyback especially with the stock at current levels, but at some point, you have a buyback, but you also have an opportunity to buy used gas potentially at a pretty cheap price. What's the dynamic on that or what's the thought process on that?

知道了。然後，第三個也是最後一個問題，顯然我是回購的粉絲，尤其是在當前水平的股票下，但在某些時候，你會回購，但你也有機會以相當便宜的價格購買二手天然氣。這方面的動態或思考過程是什麼？

So, when we look at our free cash flow, we will certainly look first to support the business and the working capital needs and then we seem to be generating more cash than needed for that. So, we are looking at acquisitions and also opportunistic share repurchases. It will be those three pillars. But first and foremost is for the business. But fortunately for us, our free cash flow generation is more than what's needed for our business with our strategic growth.

因此，當我們考慮自由現金流時，我們肯定會先考慮支持業務和營運資金需求，然後我們似乎會產生比所需更多的現金。因此，我們正在考慮收購以及機會性股票回購。這將是這三個支柱。但首先也是最重要的是為了業務。但幸運的是，我們產生的自由現金流超出了我們業務策略成長所需的量。

I mean, at some point, would you want to acquire more used gas as opposed to build up working capital or inventory on the used gas side, especially at some point, I'm a fan I'm a believer that the market is going to change, pricing is going to change and there's an opportunity here. (inaudible)

我的意思是，在某些時候，您是否想要購買更多的用過的天然氣，而不是在用過的天然氣方面建立營運資金或庫存，特別是在某些時候，我是一個粉絲，我相信市場正在發展要改變，定價就會改變，這就是機會。（聽不清楚）

Brian expressed it well in that, first and foremost, we want to make sure we have sufficient cash to meet our needs and it's mainly working capital needs for inventory. So, we are certainly not going to somehow limit our activities there or redirect cash if to the extent we make business decisions that we need more relative to inventory and inventory dollars, and particularly as it relates to dollars spent on buying used gas.

Brian說得很好，首先，我們要確保我們有足夠的現金來滿足我們的需求，主要是庫存的營運資金需求。因此，如果我們做出的業務決策需要更多與庫存和庫存美元相關的業務決策，特別是與購買二手天然氣所花費的美元相關的業務決策，我們當然不會以某種方式限制我們在那裡的活動或重新分配現金。

With that said, I think we've talked about this a couple of times. We don't believe that our dollars in ending inventory at December 31, 2024 will need to be higher than the dollars at December 31, 2023. And so far we're managing the business and that is the outcome thus far.

話雖如此，我想我們已經討論過這個問題好幾次了。我們認為 2024 年 12 月 31 日的期末庫存美元不需要高於 2023 年 12 月 31 日的美元。到目前為止，我們正在管理業務，這就是迄今為止的結果。

Obviously, if things change, we'll take a look at that. But we don't think the current allocation of capital and the $10 million amount is going to impact anything to do with our ability to buy refrigerants.

顯然，如果情況發生變化，我們會考慮一下。但我們認為目前的資本分配和 1000 萬美元的金額不會影響我們購買冷媒的能力。

That's fair. I got you. Okay. I appreciate that. I'll hop back in queue.

這很公平。我接到你了。好的。我很欣賞這一點。我會跳回隊列。

(Operator Instructions) Josh Nichols, B. Riley.

（操作員說明）Josh Nichols、B. Riley。

Yeah, thanks for taking my questions. A couple of the things I had already asked, but I'm just kind of curious where prices shake out whenever you look at like the company's inventory levels today. Obviously, you have a couple types of refrigerants in there. But generally, for HFC, like what ballpark is the average price that you guys have for the inventory level?

是的，謝謝你回答我的問題。我已經問過一些事情，但我只是有點好奇，每當你看看公司今天的庫存水準時，價格會在哪裡波動。顯然，裡面有幾種類型的冷媒。但一般來說，對於 HFC，你們的庫存水準平均價格是多少？

I'm just trying to think of the upside opportunity in the next selling season if prices start to kind of normalize and what that could mean for margins relative to that 30% level you talked about for this year based on $7.50 a pound.

我只是想考慮如果價格開始正常化，下一個銷售季節的上行機會，以及相對於您今年談到的基於每磅 7.50 美元的 30% 水平而言，這對利潤率意味著什麼。

So Josh, we'll not provide that granularity as we talked many times, we're the only public company in the refrigerant space. But when you go back to the earnings call for Q1, what we talked about is we believe that as we're selling product in the 2024 season, we are pulling from higher FIFO layers on a cost basis than we anticipate next year.

所以喬希，我們不會像我們多次談論的那樣提供這種粒度，我們是冷媒領域唯一的上市公司。但當你回到第一季的財報電話會議時，我們談論的是我們相信，當我們在 2024 年銷售產品時，我們在成本基礎上從比明年預期更高的 FIFO 層中撤出。

So, we do not believe the price of refrigerants are going to remain the same in '25 as they are in '24, But if they did just on a cost basis and FIFO inventory basis, we should have higher margins as a result of a lower cost basis entering the 25 year.

因此，我們認為冷媒的價格在 25 年不會與 24 年保持相同，但如果他們只是在成本基礎和 FIFO 庫存基礎上這樣做，我們應該有更高的利潤，因為進入25年後成本基礎降低。

Fair enough. I appreciate the context there. And then I'm looking here, I'm kind of curious, I don't think you mentioned it specifically on the call, but looking at the DLA contract, what was the DLA contract revenue in 2Q of this year relative to last year just for context for the year-over-year decline?

很公平。我很欣賞那裡的背景。然後我看這裡，我有點好奇，我認為你在電話會議上沒有具體提到這一點，但是看看 DLA 合同，今年第二季度的 DLA 合同收入相對於去年是多少只是為了了解同比下降的背景嗎？

It wasn't quite $5 million lower, it was actually about $4.2 million. I think lower. So, we've made up a little bit of ground relative to that $20 million but right now assume we are at a run rate as we talked about in that low $30 million range based on our anticipation. But as we said before, because there isn't a backlog and a long lead time, it's still possible there could be some procurement of products similar to what they did last year.

實際價格並沒有低 500 萬美元，而是約 420 萬美元。我認為更低。因此，相對於 2000 萬美元，我們已經彌補了一些基礎，但現在根據我們的預期，假設我們處於 3000 萬美元的低範圍內。但正如我們之前所說，由於沒有積壓且交貨時間較長，因此仍有可能採購一些與去年類似的產品。

Appreciate it. Last question for me, digging into the weeds a little bit. You did say there was some one-time expenses, was that like $700,000 related to USA Refrigerants and something else? So presumably, if that's in SG&A, then SG&A is going to dip back down to close to around like the $8 million level in 3Q because I know it wasn't backed out of any of the company's pro form earnings because just report GAAP.

欣賞它。我的最後一個問題，稍微深入一下。您確實說過有一些一次性費用，例如 70 萬美元與美國冷媒和其他費用有關嗎？因此，據推測，如果這是在 SG&A 中，那麼 SG&A 將回落至接近第三季度 800 萬美元的水平，因為我知道它並沒有從公司的任何預計盈利中扣除，因為只是報告 GAAP。

Yeah, we would expect that. So SG&A excluding the USA Refrigerant acquisition plus some investments in IT to support the growth of the organization. Aside from those two, SG&A is very comparable to last year and we would expect that to continue.

是的，我們希望如此。因此，SG&A 不包括美國冷媒收購以及一些 IT 投資，以支持組織的發展。除了這兩項之外，SG&A 與去年非常相似，我們預計這種情況將持續下去。

Appreciate the context. Thank you.

欣賞上下文。謝謝。

Thank you, Josh.

謝謝你，喬許。

Austin Moeller, Canaccord.

奧斯汀·莫勒，Canaccord。

Hi. Good afternoon, Brian and Brian. Just my first question here. Has the DOA signaled anything about their forward purchasing activity in Q3 and Q4? I know you have some optimism that they could ramp that up in the second half.

你好。下午好，布萊恩和布萊恩。這只是我的第一個問題。DOA 是否就第三季和第四季的遠期採購活動發出了任何訊號？我知道你對他們可以在下半場提高表現持樂觀態度。

It doesn't quite work that way. We could get orders in and fulfil it in a matter of days. There isn't much of a dialogue. There's so many different places within the DoD that could procure under this contract, that you wouldn't necessarily know who's considering what buys when. That's why it's very difficult to predict.

但事實並非如此。我們可以在幾天內收到訂單並完成它。沒有太多對話。國防部內有很多不同的地方可以根據該合約進行採購，因此您不一定知道誰在考慮何時購買什麼。這就是為什麼它很難預測。

But to be clear, as it relates to the buying that occurred last year, they are active NSN numbers and therefore it doesn't mean that they can't buy, it's just that based on the volume and activity we saw last year, we saw it ending in Q4 of last year and not reoccur. It doesn't mean it can't, we just don't want to guarantee or state that it will. But if those orders come, we will be able to fulfil them and we'll be able to fulfil them on a timely basis.

但要明確的是，因為它與去年發生的購買有關，所以它們是活躍的 NSN 號碼，因此這並不意味著他們不能購買，只是根據我們去年看到的數量和活動，我們看到它在去年第四季結束，並且沒有再次發生。這並不意味著它不能，我們只是不想保證或聲明它會。但如果這些訂單到來，我們將能夠履行它們，並且我們將能夠及時履行它們。

Great. And just a follow-up, what are you hearing in the market from your customers and other suppliers in terms of the burn down of the existing HFC stockpile that was created? Do you anticipate that it will be fully expended by the next cooling season?

偉大的。後續問題是，您在市場上從您的客戶和其他供應商那裡聽到了關於現有 HFC 庫存銷毀的情況？您預計到下一個製冷季節它會完全用完嗎？

We will get much more visibility about the answer to that question when EPA reports the 2023 inventory data. We want to see what the relative relationship is of the movement of the inventory data between December 31, 2022 and 2023.

當 EPA 報告 2023 年庫存數據時，我們將更清楚地了解該問題的答案。我們想看看2022年12月31日和2023年之間庫存資料變動的相對關係是什麼。

We believe that this year's cooling season has been quite strong as indicated certainly by our volume increases. And we would believe to the extent that there was a decline between '22 and '23 that there would be a greater decline between '23 and '24.

我們相信，今年的冷卻季節相當強勁，正如我們的銷售增加所顯示的那樣。我們相信，22 至 23 年間出現的下降，23 至 24 年間的下降幅度也會更大。

So, we're really wanting to wait for that data point, and that kind of goes back to the three things that are going to occur shortly that will make us comfortable to talk about the future. How do we end the season on pricing? What is the EPA's final refrigerant management rule look like? And what does the 2023 inventory data look like? All three of those pieces of the puzzle should be available to us to be able to discuss in the Q3 earnings call.

因此，我們真的很想等待該數據點，這可以追溯到即將發生的三件事，這將使我們能夠輕鬆地談論未來。我們如何結束定價季節？EPA 最終的冷媒管理規則是什麼樣的？2023年的庫存資料又是什麼樣的呢？我們應該能夠在第三季的財報電話會議上討論所有這三個難題。

Excellent. That's very helpful in framing it. Thanks.

出色的。這對於構建它非常有幫助。謝謝。

Thank you.

謝謝。

We have reached the end of the question and answer session, and 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 and both our long-time shareholders and those that have recently joined us for their support. And we look forward to speaking with you after the third quarter results. 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，以及我們的長期股東和最近加入我們的股東的支持。我們期待在第三季業績公佈後與您交談。祝大家晚安。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，您現在可以掛斷電話了。感謝您的參與。