Hudson Technologies(US:HDSN)2020-03-05 02:01Financial Data and Key Metrics Changes - For Q4 2019, Hudson recorded revenues of $25.8 million, slightly higher than $25.7 million in Q4 2018 [23] - Gross margin for Q4 2019 was 18.5%, an increase of 6.5% compared to 12% in Q4 2018 [23] - The company reported a net loss of $10.8 million for Q4 2019, compared to a net loss of $8.1 million in the same period of 2018 [24] - For the full year 2019, revenues were $162.1 million, a decrease of 2.7% from $166.5 million in 2018 [26] - The net loss for 2019 was $25.9 million, or $0.61 per share, compared to a net loss of $55.7 million in 2018 [27] Business Line Data and Key Metrics Changes - The increase in the number of pounds of certain refrigerants sold was noted, offset by a reduction in pricing [23] - The company maintained approximately 35% market share in refrigerants [39] Market Data and Key Metrics Changes - R-22 pricing is currently above $10 per pound, with expectations for continued demand due to the elimination of virgin production starting January 1, 2020 [7][11] - The company anticipates a shortfall in R-22 supply, creating opportunities for reclaiming and reselling R-22 [12] Company Strategy and Development Direction - Hudson aims to grow its market share and leadership position in the refrigerant reclamation business [17] - The company is focused on expanding its portfolio of products and services to appeal to a broader customer base [18] - The management is optimistic about the pricing and demand for R-22 going forward due to market dynamics [7][11] Management Comments on Operating Environment and Future Outlook - Management acknowledged the challenges faced in 2019 but expressed optimism about long-term prospects and market stabilization [17][20] - The potential impact of the coronavirus on refrigerant supply was noted, with management indicating readiness to meet customer demands [19][20] Other Important Information - The company generated $34 million in cash flow from operations in 2019 and paid down $31 million of debt [10][31] - A new revolving credit facility was established with Wells Fargo, providing financial flexibility [9][30] Q&A Session Summary Question: Were HFC volumes up in 2019? - Management indicated that there is no distinction between reclaim and virgin gas in sales, and they maintained approximately 35% market share in refrigerants [39] Question: Is inventory at a stable level entering 2020? - Management believes there is a small opportunity to rationalize inventory, but it may not be as significant as in previous years due to high-priced inventory from the Aspen acquisition [40] Question: Will the company generate free cash flow this year? - Management confirmed that positive cash flow is expected but did not provide a specific number [41] Question: Has the price of R-22 strengthened recently? - Management noted that R-22 prices have seen slow incremental increases to over $10, but it is still early in the season to predict market trends [44] Question: What is the expected timing for normal buying to begin? - Management indicated that buying typically begins when the weather warms up, with southern regions starting in mid-April and northern regions by late May [52] Question: Can you quantify other one-time costs related to SG&A? - Management stated that additional one-time costs for the past quarter were about $1.5 million, in addition to the $1.9 million write-off [54][56] Question: Any updates on the HFC market? - Management mentioned ongoing trade cases related to HFCs but expressed support for the phase-out of HFC virgin production [58]