Hudson Technologies, Inc. (NASDAQ:HDSN) Q1 2022 Earnings Conference Call May 4, 2022 5:00 PM ET

Company Participants

Jen Belodeau - Investor Relations

Brian Coleman - President and Chief Executive Officer

Nat Krishnamurti - Chief Financial Officer

Conference Call Participants

Ryan Sigdahl - Craig-Hallum

Operator

Good afternoon, ladies and gentlemen and welcome to the Hudson Technologies’ First Quarter 2022 Earnings Call. At this time, all participants have been placed on a listen-only mode and we will open the floor for your questions and comments after the presentation. It is now my pleasure to turn the floor over to your host, Jen Belodeau. Ma’am, the floor is yours.

Jen Belodeau

Thank you. Good evening and welcome to our conference call to discuss Hudson Technologies’ financial results for first quarter 2022. On the call today are Brian Coleman, President and Chief Executive Officer and Nat Krishnamurti, CFO.

I will now take a moment to read the Safe Harbor statement. During the course of this conference call, we will make certain forward-looking statements. All statements that address expectations, opinions or predictions about the future are forward-looking statements. Although they reflect our current expectations and are based on our best view of the industry and of our businesses as we see them today, they are not guarantees of future performance.

Please understand that these statements involve a number of risks and assumptions. And since these elements can change and in certain cases are not within our control, we would ask that you consider and interpret them in that light. We urge you to review Hudson’s most recent Form 10-K and other subsequent SEC filings for a discussion of the principal risks and uncertainties that affect our business and our performance and other factors that could cause our actual results to differ materially.

With that out of the way, I will now turn the call over to Brian Coleman. Go ahead, Brian.

Brian Coleman

Thank you. Good evening and thank you for joining us. 2022 is off to a very strong start building on the momentum we saw coming out of calendar year 2021. We delivered record first quarter results as demonstrated by significant revenue growth, substantially enhanced margins and improved profitability. The first quarter kicks off our traditional 9-month selling season and we saw a continuation of the upward pricing trends that characterized pricing activities in the back half of calendar year 2021.

You may remember that our 2021 season got off to a slow start and then picked up momentum as the year progressed. In addition to record revenue for the first quarter of 2022, gross margin increased to 54%, mainly due to significant increase in the average selling price without material appreciation and the cost basis of certain refrigerants. Simply put, selling prices for refrigerants increased faster than our cost of refrigerant in the quarter. Additionally, we benefited from increased sales volume as we continue to focus on developing strategic working relationships with customers who value not just our ability to meet their refrigerant needs today, but who also recognize the value of our sustainability portfolio. This growth was achieved while we continue to exit certain non-core sales, which is a pattern we started during the third quarter of last year and likely conclude this year.