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Jun 30, 2024
Hudson Q2 2024 Earnings Report
Hudson's financial performance reflected pricing pressure for certain refrigerants combined with lower activity levels from DLA contract.
Key Takeaways
Hudson Technologies reported a decrease in revenue and operating income for Q2 2024 compared to Q2 2023, primarily due to decreased selling prices for certain refrigerants and lower revenue from the DLA contract. Despite stronger refrigerant sales volume, the company faced pricing pressure and anticipates full-year revenue in the range of $240 million to $250 million with a gross margin of approximately 30%.
Revenues decreased by 17% to $75.3 million compared to Q2 2023.
Operating income decreased to $12.8 million from $27.7 million in the prior year period.
Net income decreased to $9.6 million, or $0.20 per diluted share, compared to $19.2 million, or $0.41 per diluted share in Q2 2023.
Board authorized the repurchase of up to $10 million of outstanding common stock during 2024 and 2025.
Hudson
Hudson
Forward Guidance
Hudson Technologies anticipates full year revenue in the range of $240 million to $250 million and full year gross margin of approximately 30%.
Positive Outlook
- The EPA’s Refrigerant Management Rule, mandating the use of reclaimed refrigerants for certain equipment and service sectors, is expected to be finalized in the coming month.
- The phasedown of HFCs will ultimately move pricing higher.
- The phasedown of HFCs will accelerate reclamation activity.
- The phasedown of HFCs will drive enhanced profitability in our business.
- Hudson’s leadership position in the industry, proprietary reclamation technology and longstanding customer relationships leave us well positioned to drive the necessary transition to reclaimed refrigerant as virgin supply tightens.
Challenges Ahead
- Pricing pressure for certain refrigerants could persist through the balance of this sales season.
- Second quarter results are not where we’d like them to be.
- Market pricing challenges experienced could persist through the balance of this sales season.
- Pricing for certain refrigerants decline by approximately 25% as compared to pricing levels in the second quarter of 2023
- Pricing was reduced by approximately 6% from the level we reported at the time of our first quarter earnings call.