Ryan Sigdahl: With the price headwinds this year, you’re still putting up, surprising upside to the margins. I guess keep talking at 35% or a little better. But without those price headwinds, I would think it would have been even better in the quarter. So, I guess, can you talk through structural margins in the business, in the industry, you mentioned the one-timers, but even at 38%, that’s solidly better with those price headwinds. So any extra color on the margin?
Brian Coleman: Again, I think we have done a pretty good job going back a few years. We started the initiative of trying to create more of a value proposition with not all customers, not all buyers of refrigerant, because many buyers of refrigerant are just looking for cheap price. But we focused on working with customers that had the opportunity to support recovery and reclamation, to support the principles we have around lifecycle refrigerant management. And as a result, I think the strength of the relationship helps in some respects relative to other customers who are just focused on price. And we think that’s going to be important as we enter 2024. I think and certainly I can’t say that this is true, but I think that those folks that were focused on price are going to have a hard time getting access to the supply next year, or certainly having a hard time to buy in a manner by which they previously did so.
So we’re happy with our customer base. We try to grow the customer base. We try to introduce reclamation and recovery programs to customers. We spent a lot of time this year going downstream to contractors to help educate them on the importance of recovery, to give them best practices, to help speed up the recovery once they have that opportunity. So we feel pretty good, I mean, really good, I guess, about our relationship with our customers and our ability to translate that into value and profitability.
Ryan Sigdahl: Good. Then just switching over to the carbon credit opportunity, we’re hearing more excitement in the industry around that opportunity. Any quantitative metrics you can share about growth in your carbon credits and how you think about the opportunity over the next few years?
Brian Coleman: We actually don’t necessarily think the carbon markets have a growth opportunity for Hudson. We’re currently participating in two types of markets. One is a mandatory market relative to the state of California, but the protocol that is related to refrigerants is solely attributable to the destruction of CFCs. And as you know, CFCs and CFC equipment haven’t been installed or manufactured since 1994. We just feel that that protocol and the availability of CFCs are sunsetting. And so to the extent that there are no more CFC systems at some point, then the protocol really will have no material value. On a voluntary basis, currently there’s a protocol that supports a reclamation of HFCs, but because it’s voluntary, it likely is going to go away when the mandate for uses of reclaimed refrigerants are put in place, because then it’s not really a voluntary process, it’s a mandated process, and typically when that’s the case, the voluntary protocol goes away.
So we don’t know what will happen with these different protocols, but the ones that we currently operate in likely will diminish or possibly go away in time. Alternatively, new protocols could be established, and then there could be a new opportunity if and when they were established.
Ryan Sigdahl: Helpful. Thanks. Good luck, guys.
Brian Coleman: Thank you.
Operator: The next question comes from Austin Moeller with Canaccord. Austin, please proceed.
Austin Moeller: Hi, Brian. Good evening.
Brian Coleman: Good evening.
Austin Moeller: So just a question here. Do you expect that the contractors in the HVAC industry are adequately prepared to increase the amount of reclamation that’s going on and the number of cylinders being sent to reclaimers by the second or third quarter of next year? Or do you think that it could potentially be quite chaotic just given the 40% virgin production cap?
