Brian Coleman: That’s sort of a difficult question to answer. Each potential bucket has opportunities. But really, again, it goes back to our overall acquisition strategy. We’ve never tried to acquire anyone or anything and rely on synergies or rely on overall ability to absorb overhead or whatever the case maybe. We’ve always tried to look at acquisitions in the context of one and one is more than two, or that there’s a growth strategy associated with that particular target. And so like we’ve said before that, we want to look at their customer base and their offerings and understand if we could apply their offerings to our customer base or, in more times than not, add our offerings to their customers and then drive growth that way.
And ultimately, we talked about this many times, if you really go back and look at how we did the Airgas acquisition, that was exactly the proposition. Airgas was mainly selling HFCs. We knew the long-term opportunity was HFCs. We knew there would be significant price growth in HFC. But we’re buying that EBITDA based on $2 and $3 pricing for HFCs, which we now, at least, are seeing $8. Now we thought we would see it higher than it is today. So that was part of the strategy. Also part of that strategy was that they really weren’t procuring recovered gas from that customer base. Whereas generally, our historical customer base, we do a buy-and-sell relationship. And so that we felt that it was an opportunity to be able to acquire more gas as well.
So that’s how we’re going to look at any and all acquisition going forward, irrespective of what bucket they’re in. And we do think that there’s going to be opportunities for acquisitions that will fit that growth model.
Gerry Sweeney: Okay. Got it. All right. That’s it for me. I appreciate it. Thank you.
Brian Coleman: Well thank you too, Gerry.
Nat Krishnamurti: Thank you.
Operator: Okay. We have a follow-up coming from Ryan Sigdahl with Craig-Hallum. Please proceed.
Ryan Sigdahl: Hey. Just one follow-up. A lot of questions around M&A. But with your stock at this valuation, I guess, why not just buy back your own stock instead?
Brian Coleman: Again, we could do that, but we’ve always said that, that’s sort of the third option. The first option we always have talked about is inventory. But I think we mentioned this in the year-end earnings call, we don’t see the need for more dollars in inventory, let’s say, when you compare what we believe the inventory balance to be at December 31 of 2024 compared to 2023. So that’s kind of, let’s say, locked down from a working capital point of view. So then you’re back to two remaining buckets, acquisitions and buyback. Acquisitions, we still believe the return on those dollars should be far greater than any return we would have on buying back our stock. Now our current ABL precludes us from buying back our stock. But we do believe if we went to our lender, we would be able to get a waiver for that. But at the end of the day, at the moment, we’re, let’s say, focused more on the acquisition opportunities.
Ryan Sigdahl: Just a clarification. You don’t have anything drawn on the revolver, but it still restricts you from buying back stock.
Brian Coleman: Correct. So unfortunately, the way any of these ABLs are constructed, they’re encumbering your assets irrespective of your borrowings. And typically, the way these are constructed is they preclude any cash outflows that are not going to the business itself. And so that’s – typically an ABL will – even though you have no outstanding balance, will restrict you both on dividends and buybacks. But as I said, I think there’s an opportunity, if we choose to go to the lender and get a waiver for that.
Ryan Sigdahl: Appreciate the clarification. Thanks, guys.
Brian Coleman: Thank you.
Operator: We have reached the end of the question-and-answer session, and I will now turn the call over to management for closing remarks.
Brian Coleman: Thank you, operator. I’d like to thank our employees for their continued support and dedication to our business and both our long-time shareholders and those that recently joined us for their support. We look forward to speaking with you after the first quarter results – sorry, after the second quarter results, sorry about that. And have a good night, everybody.
Operator: This concludes today’s conference and you may disconnect your lines at this time. Thank you for your participation.
