Hudson Technologies, Inc. · NASDAQ:HDSN
Hudson Technologies — Investor Presentation (November 2022)
16 slides from Hudson Technologies's investor presentation, November 2022
Slide 1: Investor Presentation
Investor Presentation November 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 • 3Q22 revenue growth of 48% to $89.5M Unprecedented • Refrigeration and cooling systems are integral to 3Q22 Industry operating residential and commercial buildings Performance • Strong profitability: $0.62 per diluted Disruption share • Installed base of >100M HFC
Slide 4: Mandated HFC Phase Down Driving Current Momentum
MANDATED HFC PHASE DOWN DRIVING CURRENT MOMENTUM 2022 YTD Revenue: $277.8M Operating Income: $124.4M Free Cash Flow: $67.4M Total Debt Reduction: $42.0M 2025 Targets Revenue: >$400M Gross Margin: ~35% • Gross margins expected to remain above historical levels but anticipated to moderate from 2022 le
Slide 5: Strategically Positioned in Refrigerant Supply Chain
STRATEGICALLY POSITIONED IN REFRIGERANT SUPPLY CHAIN • Leading source for refrigerants (CFC, HCFC, HFC, HFOs) – Broadest Product Range: Legacy CFCs, HCFCs, HFCs and Next Generation HFOs – Longstanding Customer and Supplier relationships • DoD contract with maximum value of $400 million over 10 years
Slide 6: 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 6
Slide 7: HFC Opportunity Begins
HFC OPPORTUNITY BEGINS • AIM Act* Implemented in December 2020 created Virgin HFC Phase Down to Combat Climate Change – The Act Promotes use of Reclamation to Meet Industry Demand • AIM Act Creates HFC Shortage in Just Over 2 Years – As mandated by AIM Act, EPA published final rule allocating allowa
Slide 8: AIM Act Mandates Virgin HFC Phase Down; Driving Demand for Reclaimed HFCs
AIM ACT MANDATES VIRGIN HFC PHASE DOWN; DRIVING DEMAND FOR RECLAIMED HFCS EPA To Implement Virgin Production Step Down 2024 Significant Supply Shortages 8
Slide 9: Benefits of HFC Phase Down vs. R-22 Phase Down
Benefits of HFC Phase Down vs. R-22 Phase Down HFC Phase Down R-22 Phase Down – Accelerated phase down process – Lengthy phase down process • Refrigerants phased out ~5 years ahead of • Equipment banned in 2010 equipment • Refrigerant banned in 2019 – EPA has legislated mandate to support • Allowanc
Slide 10: 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 10
Slide 11: Hudson Reclaim Solutions & Leadership
HUDSON RECLAIM SOLUTIONS & LEADERSHIP • Developed the market: One of the first companies to pay for recovered refrigerant – First purchased refrigerants in 1990 • Size: Largest reclaimer ~35% market share of U.S. reclaim – Handle in excess of 200,000 reclaim cylinders per year • Quality: Own 2 of th
Slide 12: Implications to Supply Chain
IMPLICATIONS TO SUPPLY CHAIN Limited by Allowances Limited by End-Use Restrictions 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, Chemica
Slide 13: Reclaim Requirements & OEMs
Reclaim Requirements & OEMs • California Air Resources Board (CARB) has proposed a requirement that OEMs use minimum of 10% reclaimed refrigerant on factory charged equipment; Unprecedented development – EPA has further rulemaking ahead and will likely adopt California’s model • Hudson well-suited t
Slide 14: Pursuing Strategic OEM Partnerships
Pursuing Strategic OEM Partnerships Sustainability partnerships focused on recovering, reclaiming and reusing refrigerants to reduce waste and greenhouse gas emissions • Lennox International – Global leader in sustainability – Hudson will serve as exclusive supplier of reclaimed refrigerants for the
Slide 15: Opportunities for a Greener Future: Promoting Carbon Offset
OPPORTUNITIES FOR A GREENER FUTURE PROMOTING CARBON OFFSET • Hudson has Initiated Projects to Develop and Market Carbon Offsets Resulting from Refrigerant Reclamation – CARB CFC Protocol: Carbon credit offsets related to ozone depleting substances (R-11 & R-12) – American Carbon Registry (ACR): Carb
Slide 16: Positioned for Growth
POSITIONED FOR GROWTH Market Leader in Refrigerant Sales and Reclamation – AIM Act mandates reduction of virgin HFC production and requires EPA to promote reclamation opportunities – HFC phase out represents ~2X the R-22 opportunity; >100M installed base of HFC units need HFCs to operate Circular Ec
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