Energy Recovery(US:ERII)2024-10-30 20:14Revenue Performance - Revenue for Q3 2024 was $38,584,000, an increase from $37,036,000 in Q3 2023, representing a growth of approximately 4.2%[14] - Total revenue for the three months ended September 30, 2024, was $38,344,000, an increase from $36,812,000 in the same period last year, representing a growth of 4.1%[28] - Revenue for the three months ended September 30, 2024, was $38,584 thousand, a 4% increase from $37,036 thousand in the same period of 2023[71] - For the nine months ended September 30, 2024, total revenue was $224,351 thousand, a 9% increase from $205,622 thousand in the same period of 2023[70] - Revenue from the Middle East and Africa for the three months ended September 30, 2024, was $28,043,000, compared to $24,543,000 in the same period last year, reflecting a growth of 14.1%[29] - Revenue from the Water segment for the three months ended September 30, 2024, was $38,344,000, while Emerging Technologies contributed $240,000[58] - Megaproject channel revenue increased by 8% to $29,009 thousand, accounting for 75% of total revenue for the three months ended September 30, 2024[67] - Aftermarket channel revenue grew by 14% to $13,739 thousand, while Original Equipment Manufacturer (OEM) channel revenue decreased by 7% to $4,919 thousand[68] Profitability Metrics - Gross profit for Q3 2024 was $25,112,000, compared to $25,882,000 in Q3 2023, indicating a decrease of about 3%[14] - Gross profit for the three months ended September 30, 2024, was $25,112 thousand, with a gross margin of 65.1%, down from 69.9% in the prior year[76] - The company reported a net income of $8,481,000 for the three months ended September 30, 2024, compared to $9,660,000 in the same period last year, indicating a decrease of 12.2%[36] - Basic net income per share for the three months ended September 30, 2024, was $0.15, down from $0.17 in the same period last year, a decline of 11.8%[37] - Operating income for the nine months ended September 30, 2024, was $18,052,000, compared to a loss of $5,891,000 for the same period in 2023[58] Expenses and Liabilities - Operating expenses for Q3 2024 were $18,055,000, up from $16,749,000 in Q3 2023, indicating an increase of approximately 7.8%[14] - Total operating expenses for the three months ended September 30, 2024, were $18,055 thousand, an increase of 7.8% compared to $16,749 thousand in the same period of 2023[78] - Total operating expenses for the nine months ended September 30, 2024, were $55,704,000, compared to $49,144,000 for the same period in 2023[58] - Total liabilities decreased to $28,832,000 from $33,166,000, a reduction of about 13.0%[13] - Total accrued expenses and other liabilities decreased from $15.8 million on December 31, 2023, to $10.6 million on September 30, 2024, representing a reduction of approximately 32.5%[43] Cash and Investments - Cash and cash equivalents decreased to $63,261,000 from $68,098,000, a decline of approximately 7.5%[12] - Cash, cash equivalents, and restricted cash at the end of the period were $63,393 million, an increase from $51,566 million at the end of Q3 2023[18] - The investment portfolio was valued at $808.1 million, primarily in investment-grade marketable debt instruments, as of September 30, 2024[101] - The total fair value of short and long-term investments was $76.7 million as of September 30, 2024, with gross unrealized losses of $324,000[47] - The company reported total available-for-sale investments with unrealized loss positions of $8.1 million as of September 30, 2024, compared to $31.2 million on December 31, 2023[49] Equity and Stock Performance - Total stockholders' equity increased to $233.873 million in Q3 2024, up from $194.029 million in Q3 2023, representing a growth of 20.5%[17] - The company issued 459,312 shares of common stock in Q3 2024, compared to 99,091 shares in Q3 2023, marking a significant increase in equity financing[17] - The beginning balance of retained earnings was $73.754 million, with an ending balance of $82.235 million, reflecting an increase of 11.9%[17] - Stock-based compensation for the nine months ended September 30, 2024, was $8.512 million, up from $5.811 million in the same period of 2023, indicating a rise of 46.5%[18] Future Outlook and Strategic Focus - The company expects sales outside the U.S. to remain a significant portion of its revenue in the future[7] - The company believes that leveraging its pressure exchanger technology will unlock new commercial opportunities moving forward[7] - The company is focused on developing high-performance solutions aimed at improving energy efficiency and reducing emissions across various industrial processes[19] - The company is committed to developing new technologies and expanding into emerging markets, particularly in wastewater filtration and energy recovery applications[63] Tax and Legal Matters - The effective tax rate for the three months ended September 30, 2024, was 3.9%, compared to 5.1% for the same period in 2023[56] - The company recorded no material losses from litigation that would have a material effect on its financial position as of September 30, 2024[55] - The company is not currently involved in any legal proceedings that are likely to have a material adverse effect on its financial condition or operating results[105]