Energy Recovery Sets Product Revenue Record in the First Quarter
May 06, 2021 at 16:02 PM EDT
SAN LEANDRO, CA / ACCESSWIRE / May 6, 2021 / Energy Recovery, Inc. (Nasdaq:ERII) today announced its financial results for the first quarter ended March 31, 2021. The Company posted record-high quarterly product revenue in its core Water segment with 52% growth compared to the first quarter of 2020.
"Today, Energy Recovery is at a key inflection point as we embark on a path of sustainable, disciplined, and diversified growth. First, we must protect and grow our seawater desalination business, which is thriving as our quarterly results show," said Robert Mao, Chairman of the Board, President, and Chief Executive Officer of Energy Recovery.
Mr. Mao continued, "Second, we are expanding our pressure exchanger technology's aperture and developing pressure exchanger-based solutions for new industries. We specifically look for markets where we can reduce costs and accelerate customers' environmental sustainability. I am particularly excited by our progress developing an energy recovery device for carbon dioxide (CO2) commercial refrigeration. The U.S. Environmental Protection Agency just this week announced an accelerated phase out of HFCs which should hasten adoption of CO2 technology in the U.S. in the coming years. Our testing indicates that our solution excels at saving energy where today's market-leading technology fails - in warmer climates."
Mr. Mao concluded, "The coming months will be an exciting time for Energy Recovery. Significant growth in our core desalination market, combined with our strong financial position and exciting research and development ("R&D") results, gives us confidence that the future is bright."
Product Channel Revenue
"Our desalination business drove significant growth in the first quarter, and we continue to work towards a more diversified revenue stream for the future," said Joshua Ballard, Chief Financial Officer of Energy Recovery. "We also maintained our discipline in OPEX. General and administrative ("G&A") spend was 4% lower year-over-year, and we reduced our R&D spend over 30% while still making significant progress in our emerging technology projects. With our healthy gross margin, we can both improve profitability and invest in disciplined future growth."
To reflect Energy Recovery's evolving business, the Company realigned its segment reporting starting in the first quarter of fiscal year 2021 and recast the prior year amounts for comparability. Income and type of expense activities included in the Company's Water and Emerging Technologies segments and corporate operating expenses are as follows:
Water segment: Includes seawater desalination and industrial wastewater sales and service, SWRO and industrial wastewater R&D and sales & marketing ("S&M") efforts, other water-related R&D activities, and certain water-related S&M and G&A expenses previously reported under corporate expenses.
Emerging Technologies segment: Includes R&D efforts in continued development of the VorTeq, sales and support of the IsoBoost® in natural gas processing which lowers the energy needed for sour gas treatment, and R&D efforts for new product development outside of desalination and industrial wastewater, and certain emerging technologies-related S&M and G&A activity expenses previously reported under corporate expenses.
Corporate operating expense: Includes certain operating expenses related to corporate activities outside of the operating segments, such as audit and accounting, some corporate legal, Board, and other separately managed general expenses not related to the identified segments.
First Quarter 2021 Business Highlights
Emerging Technologies Segment
Corporate Operating Expenses
Bottom Line Summary
On a quarterly basis, we reported a net income of $6.9 million, or $0.12 per diluted share, for the first quarter ended March 31, 2021, compared to a net income of $0.6 million, or $0.01 per diluted share, for the first quarter ended March 31, 2020.
Cash Flow Highlights
The Company finished the first quarter ended March 31, 2021 with cash and cash equivalents of $105.4 million, and short-term investments of $14.6 million, which represents a combined total of $120.0 million.
Certain matters discussed in this press release and on the conference call are "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, including the Company's belief that the company is embarking on a path of sustainable, disciplined and diversified growth; our ability to develop pressure exchanged-based solutions for new industries; our belief that our carbon dioxide commercial refrigeration solution excels in warmer climates as compared to the market-leading technology; our belief that the Company's future is bright; our belief that the Company can work towards a more diversified revenue stream for the future; and our belief that the Company is making significant progress in our emerging technology projects. These forward-looking statements are based on information currently available to us and on management's beliefs, assumptions, estimates, or projections and are not guarantees of future events or results. Potential risks and uncertainties include any other factors that may have been discussed herein regarding the risks and uncertainties of the Company's business, and the risks discussed under "Risk Factors" in the Company's Form 10-K filed with the U.S. Securities and Exchange Commission ("SEC") for the year ended December 31, 2020, as well as other reports filed by the Company with the SEC from time to time. Because such forward-looking statements involve risks and uncertainties, the Company's actual results may differ materially from the predictions in these forward-looking statements. All forward-looking statements are made as of today, and the Company assumes no obligation to update such statements.
Conference Call to Discuss First Quarter 2021 Financial Results
LIVE CONFERENCE CALL:
Thursday, May 6, 2021, 2:00 PM PDT / 5:00 PM EDT
CONFERENCE CALL REPLAY:
Expiration: Sunday, June 6, 2021
Investors may also access the live call or the replay over the internet at ir.energyrecovery.com. The replay will be available approximately three hours after the live call concludes.
Energy Recovery uses the investor relations section on its website as means of complying with its disclosure obligations under Regulation FD. Accordingly, investors should monitor Energy Recovery's investor relations website in addition to following Energy Recovery's press releases, SEC filings, and public conference calls and webcasts.
About Energy Recovery
Energy Recovery creates technologies that solve complex challenges for industrial fluid-flow markets worldwide. Building on our pressure exchanger technology platform, we design and manufacture solutions that make industrial processes more efficient and sustainable. What began as a game-changing invention for desalination has grown into a global business accelerating the environmental sustainability of customers' operations in multiple industries. Headquartered in the San Francisco Bay Area, Energy Recovery has manufacturing, research and development facilities across California and Texas with sales and on-site technical support available globally. For more information, please visit www.energyrecovery.com.
ENERGY RECOVERY, INC.
ENERGY RECOVERY, INC.
ENERGY RECOVERY, INC.
ENERGY RECOVERY, INC.
SOURCE: Energy Recovery
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