Hudson Technologies, Inc. · NASDAQ:HDSN
Hudson Technologies — Investor Presentation (June 2022)
21 slides from Hudson Technologies's investor presentation, June 2022
Slide 1: Investor Presentation June 2022
INVESTOR PRESENTATION JUNE 2022
Slide 2: Safe Harbor Statement
SAFE HARBOR STATEMENT Statements contained herein which are not historical facts constitute forward-looking statements. Such forward-looking statements involve a number of known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the
Slide 3: Investment Considerations
INVESTMENT CONSIDERATIONS Record • 1Q22 revenue growth of 149% to $84M Unprecedented • Refrigeration and cooling systems are integral to 1Q22 • Strong profitability: $0.63 per diluted Industry operating residential and commercial buildings Performance share Disruption • Current installed base of >10
Slide 4: Record First Quarter 2022 Results Provide Strong Foundation as AIM Act Is Implemented
RECORD FIRST QUARTER 2022 RESULTS PROVIDE STRONG FOUNDATION AS AIM ACT IS IMPLEMENTED 2023 2024 Q1 2022 TARGETED ANNUAL OPERATING MODEL Revenue $84M Revenue ~$350+M* Gross Profit $45M Gross Profit $105M Operating Income $38M Operating Income $72M *Based on assumption that HFC pricing follows similar
Slide 5: All Refrigerants Are High Global Warming Gases
ALL REFRIGERANTS ARE HIGH GLOBAL WARMING GASES In excess of 15% of world Pound for pound, HFC emissions could energy consumption is refrigerants have up to potentially produce up related to refrigeration and 4,000 times more GWP to 19% of CO2 air conditioning than carbon dioxide emissions by 2050 (C
Slide 6: Energy Efficiency & Climate Concerns Drive Refrigerant Evolution
ENERGY EFFICIENCY & CLIMATE CONCERNS DRIVE REFRIGERANT EVOLUTION CFCs HCFCs HFCs HFOs Chlorofluorocarbons Hydrochlorofluorocarbons Hydrofluorocarbons Hydrofluoroolefins Ozone Depleting (ODP) 1.0 0.1 ~0 ~0 Global Warming Potential 8000 2000 2000 < 750 • American Innovation and Manufacturing Act (AIM
Slide 7: Pioneers in Sustainable Measures
PIONEERS IN SUSTAINABLE MEASURES Partnership Toward a Sustainable Future. Hudson Technologies has offered sustainable solutions for the HVACR industry for over thirty years. We understood and embraced the need to actively manage the refrigerant life-cycle and built a business around environmentally
Slide 8: Strategically Positioned in Supply Chain
STRATEGICALLY POSITIONED IN SUPPLY CHAIN • Leading source for refrigerants (CFC, HCFC, HFC, HFOs) – Providing all refrigerants: HFCs & next generation as well as legacy via reclamation – Longstanding customer relationships • DoD contract with maximum value of $400 million over 10 years – Prime contr
Slide 9: National Presence
NATIONAL PRESENCE • Diverse customer base: - 7,000+ customers • 40+ facilities and stocking points • 3 reclamation facilities Corporate Office • One of few companies with Reclamation Centers Stock Points AHRI certified laboratories Government Fulfillment Centers 9
Slide 10: Reclamation Opportunity & Next Gen Refrigerants
Reclamation Opportunity & Next Gen Refrigerants As R-22 Opportunity Begins to Sunset Over the Next 10 to 20 Years, HFC Opportunity is Introduced 10
Slide 11: R-22 Market Opportunity Continues
R-22 MARKET OPPORTUNITY CONTINUES • Virgin R-22 Production Ceased as of December 31, 2019 – 2021 and beyond: Reclaimers provide 100% of R-22 • Aftermarket Demand For R-22 Expected to Continue for Approximately 20 Years – ~50 million residential & light commercial systems in 2018* * Source: J.P. Morg
Slide 12: HFC Opportunity Begins
HFC OPPORTUNITY BEGINS • AIM Act Implemented in December 2020 created Virgin HFC Phase Down; Promotes Reclamation • AIM Act Creates HFC Shortage in Just Over 2 Years – As mandated by AIM Act, EPA published final rule allocating allowances for the production and consumption of HFCs – 40% reduction in
Slide 13: The AIM Act: What Does It Mean?
THE AIM ACT: WHAT DOES IT MEAN? EPA Establishes a Plan to Reduce Emissions of HFC’s 5. Tracking: QR code tracking on cylinders 1. Virgin HFC Phasedown: Through 6. Sectors: AIM Act applies to all sectors that utilize production and consumption allowances HFC’s, not just HVACR 2. HFC Refrigerant Manag
Slide 14: Hudson Reclaim Solutions & Leadership
Hudson Reclaim Solutions & Leadership • Developed the market: One of the first, if not the first, companies to pay for recovered refrigerant – First purchased refrigerants in 1990 • Size: Hudson has ~35% market share of U.S. reclaim – Largest reclaimer in the U.S. – Handle in excess of 200,000 recla
Slide 15: AIM Act Mandates Virgin HFC Phasedown; Driving Demand for Reclaimed HFCs
AIM ACT MANDATES VIRGIN HFC PHASEDOWN; DRIVING DEMAND FOR RECLAIMED HFCS EPA To Implement Virgin Production Step Down 2024 Significant Supply Shortages 15
Slide 16: HFC Opportunity Significant & Growing
HFC OPPORTUNITY SIGNIFICANT & GROWING • HVAC infrastructure continues to grow at 5%-10% annually; current growth is HFC-based – Estimated installed base of >100 million HFC systems in 2020 – Reclaimed HFCs: ~6M pounds in 2020 – Phase down schedule expected to drive reclaimed HFC growth to meet deman
Slide 17: Refrigerant Phase Out Supply Chain
REFRIGERANT PHASE OUT SUPPLY CHAIN Supply End Customer ~20% virgin New (Virgin) Gas gross margin • Residential Honeywell Homes Chemours Arkema • Light ~50% reclaim Commercial gross margin • Industrial Reclaimed Gas • 24/7 Cooling (Supermarkets, Chemical Plants) Dirty Gas Returned to Hudson Becomes S
Slide 18: A Leader in the Fragmented Reclamation Market
A LEADER IN THE FRAGMENTED RECLAMATION MARKET Hudson captures approximately 35% of the reclaim market Ability to Reclaim Other ~30 different and Recycle ALL companies Types of Refrigerants 18
Slide 19: Benefitting from State Legislation Initiatives
BENEFITTING FROM STATE LEGISLATION INITIATIVES California Air Resources Board Hudson Well-Suited to Assist (CARB) Compliance – Robust customer base provides – Proposed requirement that OEMs source to harvest and reclaim use minimum of 10% reclaimed refrigerants refrigerant in factory charged – Exten
Slide 20: Promoting Carbon Offset Opportunities for a Greener Future
PROMOTING CARBON OFFSET OPPORTUNITIES FOR A GREENER FUTURE • Hudson has Initiated Projects to Develop and Market Voluntary Carbon Offsets Resulting from Refrigerant Reclamation – CARB CFC Protocol: Carbon credit offsets related to ozone depleting substances (R-11 & R-12) – American Carbon Registry (
Slide 21: Positioned for Growth as Industry Evolves
POSITIONED FOR GROWTH AS INDUSTRY EVOLVES Leverage Scale to Drive Refrigerant Sales – Supplying the marketplace through a comprehensive portfolio of legacy, current and next generation refrigerants Unprecedented Industry Disruption Presents Significant Opportunity – Refrigeration and cooling systems
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