HDSN - Hudson closes 2022 with record revenues and profitability

2023-03-09 13:19:38 ET

Hudson Technologies ( NASDAQ: HDSN ) is trading around -5% on Thursday despite finishing 2022 with a better-than-expected show for Q4. Revenues were up 26% Y/Y to $47.4M, driven by higher prices for certain refrigerants and increased volumes.

Howevr, margins were down from 45% in the quarter last year to 32% in Q4, and net profit dipped slightly to $5.1M from $6.2M a year ago.

CEO Brian Coleman noted: "We delivered a solid Q4 consistent with historical performance, which is typically our lowest revenue quarter because it falls outside of our nine-month selling season. 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."

Hudson also posted record revenues of $325.2M for 2022, up 69% Y/Y and driven by higher selling prices for certain refrigerants. Gross margin was also up for the full year to 50%, from 37% in 2021, thanks to the higher prices.

Net income surged to $103.8M for 2022 from just $32.3M in 2021, and this along with improved cash flow helped Hudson reduce total outstanding debt to $46.8M at the close of 2022 from $94.9M.

The CEO added: "“We remain optimistic that the ongoing stepdown in HFC production and consumption allowances mandated by the AIM Act will benefit our business. The 10% stepdown in virgin production and consumption that began in 2022 remains in place for 2023, as we track toward a 40% baseline reduction beginning in 2024. As we’ve previously mentioned, we believe the current phasedown schedule will drive higher demand for our reclaimed refrigerants as virgin HFCs become increasingly scarce. Likewise, we are encouraged by legislation at both the federal and state levels that promotes the use of reclaimed refrigerant."

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