| --- | --- | --- | --- | --- | --- | --- | |----------------------------------------------------------------------------------------------------------------|-------|-------------------|-------|-------|-------|--------------| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Driving Industrial Sustainability Delivering Value in Fluid-Flow Processes Midwest IDEAS Investor Conference – | | 25-26 August 2021 | | | | | | | | | | | | NASDAQ: ERII | FORWARD LOOKING STATEMENT This p ...

Energy Recovery, Inc. (NASDAQ:ERII) Q2 2021 Earnings Conference Call August 5, 2021 5:00 PM ET Company Participants Jim Siccardi - VP, IR Bob Mao - Chairman, President & CEO Joshua Ballard - CFO Conference Call Participants Pavel Molchanov - Raymond James Neil Tseng - Friendly Securities Operator Greetings and welcome to Energy Recovery Second Quarter 2021 Earnings Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Ins ...

Part I - Financial Information [Financial Statements (Unaudited)](index=6&type=section&id=Item%201%20Financial%20Statements%20(Unaudited)) This section presents the unaudited condensed consolidated financial statements, including balance sheets, statements of operations, and cash flows, with notes on segment reporting and revenue disaggregation [Condensed Consolidated Balance Sheets](index=6&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of June 30, 2021, total assets were **$209.3 million**, a slight increase from **$204.3 million** at December 31, 2020, primarily reflecting growth in stockholders' equity to **$179.8 million** Condensed Consolidated Balance Sheet Highlights (in millions) | Account | June 30, 2021 | December 31, 2020 | | :--- | :--- | :--- | | **Total Current Assets** | $147.8 | $143.2 | | **Total Assets** | $209.3 | $204.3 | | **Total Current Liabilities** | $13.3 | $15.7 | | **Total Liabilities** | $29.5 | $32.7 | | **Total Stockholders' Equity** | $179.8 | $171.6 | [Condensed Consolidated Statements of Operations](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) For the six months ended June 30, 2021, the company reported net income of **$7.9 million**, a significant decrease from **$17.5 million** in 2020, primarily due to the absence of license revenue Statement of Operations Summary (in millions, except per share data) | Metric | Q2 2021 | Q2 2020 | Six Months 2021 | Six Months 2020 | | :--- | :--- | :--- | :--- | :--- | | Product Revenue | $20.6 | $19.3 | $49.5 | $38.3 | | License and Development Revenue | $0 | $24.4 | $0 | $26.9 | | **Total Revenue** | **$20.6** | **$43.6** | **$49.5** | **$65.2** | | Income from Operations | $0.3 | $21.3 | $6.4 | $21.4 | | **Net Income** | **$1.1** | **$16.9** | **$7.9** | **$17.5** | | Diluted EPS | $0.02 | $0.30 | $0.13 | $0.31 | [Condensed Consolidated Statements of Cash Flows](index=11&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash provided by operating activities significantly improved to **$11.5 million** for the six months ended June 30, 2021, while investing and financing activities saw substantial changes Cash Flow Summary (in millions) | Cash Flow Activity | Six Months Ended June 30, 2021 | Six Months Ended June 30, 2020 | | :--- | :--- | :--- | | Net cash provided by (used in) operating activities | $11.5 | $(0.3) | | Net cash provided by investing activities | $0.4 | $35.8 | | Net cash (used in) provided by financing activities | $(2.9) | $1.1 | | **Net change in cash** | **$9.0** | **$36.6** | [Notes to Condensed Consolidated Financial Statements](index=12&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) The notes detail accounting policies, revenue disaggregation by geography, segment realignment into Water and Emerging Technologies, and the impact of the VorTeq License Agreement termination - In Q1 2021, the company realigned its segment reporting into two segments: Water (desalination and industrial wastewater products) and Emerging Technologies (VorTeq, ISOBoost, PX G1300, etc.). Prior year amounts were recast for comparability[96](index=96&type=chunk)[97](index=97&type=chunk) - The termination of the VorTeq License Agreement with Schlumberger, effective June 1, 2020, led to the full recognition of the remaining **$24.4 million** deferred revenue balance in Q2 2020. No further license revenue was recognized from this agreement[47](index=47&type=chunk)[102](index=102&type=chunk)[124](index=124&type=chunk) Revenue by Geography (Six Months Ended June 30, 2021, in millions) | Region | Revenue | % of Total | | :--- | :--- | :--- | | Middle East and Africa | $37.4 | 75.5% | | Asia | $9.5 | 19.2% | | Americas | $1.4 | 2.8% | | Europe | $1.3 | 2.5% | | **Total** | **$49.5** | **100%** | - In March 2021, the Board authorized a stock repurchase program of up to **$50.0 million**. As of June 30, 2021, **656,938 shares** had been repurchased for **$11.6 million**[94](index=94&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=35&type=section&id=Item%202%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses a **24% decrease** in total revenue for H1 2021 due to the VorTeq agreement termination, offset by **30% product revenue growth**, and segment realignment [Results of Operations](index=38&type=section&id=Results%20of%20Operations) Total revenue for H1 2021 decreased **24%** to **$49.5 million** due to the absence of license revenue, while product revenue increased **30%** driven by the Megaproject channel Total Revenue Comparison (in millions) | Revenue Type | Six Months 2021 | Six Months 2020 | Change $ | Change % | | :--- | :--- | :--- | :--- | :--- | | Product revenue | $49.5 | $38.3 | $11.3 | 30% | | License and development revenue | $0 | $26.9 | $(26.9) | (100%) | | **Total revenue** | **$49.5** | **$65.2** | **$(15.6) | **(24%)** | Product Revenue by Channel (Six Months Ended June 30, in millions) | Channel | 2021 | 2020 | Change $ | Change % | | :--- | :--- | :--- | :--- | :--- | | Megaproject | $37.0 | $26.4 | $10.6 | 40% | | Original equipment manufacturer | $7.1 | $7.6 | $(0.5) | (7%) | | Aftermarket | $5.5 | $4.2 | $1.2 | 29% | | **Total product revenue** | **$49.5** | **$38.3** | **$11.3** | **30%** | - Product gross margin for the first six months of 2021 decreased to **67.4%** from **68.0%** in 2020. This was attributed to rising labor and overhead costs, lower average PX selling prices, and a change in product mix, which offset gains from operational efficiencies[128](index=128&type=chunk) - R&D expenses for the first six months of 2021 decreased by **32%** to **$8.9 million**, primarily due to lower testing supplies expenditures related to reduced development of the VorTeq technology[137](index=137&type=chunk)[139](index=139&type=chunk) [Liquidity and Capital Resources](index=47&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintains strong liquidity with **$103.3 million** in cash and **$17.4 million** in investments, sufficient to meet future capital requirements, and initiated a **$50.0 million** stock repurchase program - Principal sources of liquidity as of June 30, 2021, consisted of **$103.3 million** in cash and cash equivalents, **$17.4 million** in short-term investments, and **$7.6 million** in net accounts receivable[154](index=154&type=chunk) - A stock repurchase program of up to **$50.0 million** was authorized on March 9, 2021. By June 30, 2021, the company had repurchased **656,938 shares** for **$11.6 million**[157](index=157&type=chunk) Cash Flow Summary (Six Months Ended June 30, in millions) | Cash Flow Activity | 2021 | 2020 | | :--- | :--- | :--- | | Net cash provided by (used in) operating activities | $11.5 | $(0.3) | | Net cash provided by investing activities | $0.4 | $35.8 | | Net cash (used in) provided by financing activities | $(2.9) | $1.1 | [Quantitative and Qualitative Disclosures About Market Risk](index=50&type=section&id=Item%203%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's market risks are minimal, primarily foreign currency and interest rates, with foreign currency exposure being insignificant and interest rate risk managed through short-term investments - Foreign currency exposure is considered insignificant as revenue contracts are denominated in USD, and the company does not currently hedge this risk[173](index=173&type=chunk)[174](index=174&type=chunk)[176](index=176&type=chunk) - Interest rate risk is managed by investing in a portfolio with a weighted average maturity of **less than seven months**. A hypothetical **1% interest rate increase** would decrease the fair value of its **$17.4 million** debt securities portfolio by **less than $0.1 million**[178](index=178&type=chunk) [Controls and Procedures](index=50&type=section&id=Item%204%20Controls%20and%20Procedures) Management, including the CEO and CFO, concluded that disclosure controls and procedures were effective as of June 30, 2021, with no material changes to internal controls - The President and Chief Executive Officer and the Chief Financial Officer concluded that as of June 30, 2021, the company's disclosure controls and procedures are effective[180](index=180&type=chunk) - There were no changes in internal control over financial reporting during the quarter that materially affected, or are reasonably likely to materially affect, internal controls[181](index=181&type=chunk) Part II - Other Information [Legal Proceedings](index=52&type=section&id=Item%201%20Legal%20Proceedings) As of June 30, 2021, the company reported no material losses from legal proceedings that were considered probable or reasonably possible - As of June 30, 2021, the company determined there were no material losses from litigation that were probable or reasonably possible to accrue for[89](index=89&type=chunk)[185](index=185&type=chunk) [Risk Factors](index=52&type=section&id=Item%201A%20Risk%20Factors) The company reports no material changes to its risk factors from those previously disclosed in its 2020 Annual Report and Q1 2021 10-Q filing - There have been no material changes in risk factors from those disclosed in the 2020 Annual Report and the Q1 2021 10-Q[186](index=186&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=52&type=section&id=Item%202%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company repurchased **656,938 shares** for **$11.6 million** during Q2 2021 under its **$50.0 million** stock repurchase program, with **$38.4 million** remaining Issuer Purchases of Equity Securities (Q2 2021, in millions) | Period | Total Shares Purchased | Average Price Paid per Share | Approx. Dollar Value Remaining in Program | | :--- | :--- | :--- | :--- | | April 1 – April 30, 2021 | 1,770 | $17.90 | $49.97 | | May 1 – May 31, 2021 | 655,168 | $17.57 | $38.45 | | June 1 – June 30, 2021 | 0 | N/A | $38.45 | | **Total** | **656,938** | **-** | **$38.45** | [Other Items](index=52&type=section&id=Item%203-6) This section covers standard disclosures, reporting no defaults on senior securities, no mine safety disclosures, and no other material information - Item 3: No defaults upon senior securities were reported[189](index=189&type=chunk) - Item 4: Mine Safety Disclosures are not applicable[190](index=190&type=chunk) - Item 5: No other information was reported[191](index=191&type=chunk)

Energy Recovery, Inc. (NASDAQ:ERII) Q1 2021 Earnings Conference Call May 6, 2021 5:00 PM ET Company Participants Jim Siccardi - Vice President of Investor Relations Bob Mao - Chairman, President & Chief Executive Officer Joshua Ballard - Chief Financial Officer Conference Call Participants Jason Bandel - Evercore ISI Pavel Molchanov - Raymond James Operator Greetings and welcome to Energy Recovery's First Quarter 2021 Earnings Conference Call. At this time, all participants are in a listen-only mode. A ques ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q (Mark One) ☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2021 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ____________ to __________ Commission File Number: 001-34112 Energy Recovery, Inc. (Exact Name of Registrant as Specified in its Charter) Delaware 01-0616867 ...

Energy Recovery, Inc. (NASDAQ:ERII) Q4 2020 Earnings Conference Call March 11, 2021 5:00 PM ET Company Participants Jim Siccardi - Vice President of Investor Relations Bob Mao - Chairman, President and Chief Executive Officer Joshua Ballard - Chief Financial Officer Conference Call Participants Jason Bandel - Evercore ISI Pavel Molchanov - Raymond James Nils Thommesen - Fearnley Securities Tom Curran - B. Riley Securities Operator Greetings and welcome to Energy Recovery’s Q4 Earnings Conference Call. [Oper ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington D.C. 20549 Form 10-K (Mark One) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2020 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _____ to _____ Commission File Number: 001-34112 Energy Recovery, Inc. (Exact Name of Registrant as Specified in its Charter) Delaware 01-0616867 (State or Other Ju ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q (Mark One) ☑QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2020 OR ☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ____________ to __________ Commission File Number: 001-34112 Energy Recovery, Inc. (Exact Name of Registrant as Specified in its Charter) Delaware 01-061686 ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q (Mark One) ☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2020 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ____________ to __________ Commission File Number: 001-34112 Energy Recovery, Inc. (Exact Name of Registrant as Specified in its Charter) Delaware 01-0616867 ( ...

Energy Recovery, Inc. (NASDAQ:ERII) Q2 2020 Earnings Conference Call July 30, 2020 5:00 PM ET Company Participants James Siccardi - Vice President of Investor Relations Bob Mao - Chairman, President and Chief Executive Officer Joshua Ballard - Chief Financial Officer Conference Call Participants Pavel Molchanov - Raymond James Ryan Pfingst - B. Riley Operator Greetings and welcome to the Energy Recovery Second Quarter 2020 Earnings Conference Call. At this time, all participants are in a listen-only mode. A ...