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, 2025
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)
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Delaware
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01-0616867
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|||
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(State or Other Jurisdiction of Incorporation)
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(I.R.S. Employer Identification No.)
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1717 Doolittle Drive, San Leandro, California 94577
(Address of Principal Executive Offices) (Zip Code)
(510) 483-7370
(Registrant's Telephone Number, Including Area Code)
Securities registered pursuant to Section 12(b) of the Act:
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Title of each class
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Trading Symbol
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Name of each exchange on which registered
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||
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Common Stock, $0.001 par value
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ERII
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The Nasdaq Stock Market LLC
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Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing
requirements for the past 90 days. Yes þ No ¨
Indicate by check mark whether the registrant has submitted electronically, every Interactive Data File required to be submitted pursuant to Rule 405 of
Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such
files). Yes þ No ¨
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an
emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in
Rule 12b-2 of the Exchange Act.
Large accelerated filer ☑ Accelerated filer ☐ Non-accelerated filer ☐ Smaller reporting company ☐ Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or
revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
Indicate by check mark whether the registrant is a shell company (as defined in Exchange Act Rule 12b-2). Yes ☐ No ☑
As of April 30, 2025, there were 54,499,225shares of the registrant's common stock outstanding.
Energy Recovery, Inc. | Q1'2025 Quarterly Report (Form 10-Q)
TABLE OF CONTENTS
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Page No.
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Condensed Consolidated Balance Sheets - March 31, 2025 and December 31, 2024
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Condensed Consolidated Statements of Operations - Three Months Ended March 31, 2025 and 2024
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Condensed Consolidated Statements of Stockholders' Equity- Three Months Ended March 31, 2025 and 2024
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Condensed Consolidated Statements of Cash Flows - Three Months Ended March 31, 2025 and 2024
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Exhibit Index
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Energy Recovery, Inc. | Q1'2025 Quarterly Report (Form 10-Q)| FLS 1
Forward-Looking Information
This QuarterlyReport on Form 10-Qfor the three monthsended March 31, 2025,including Part I, Item 2, "Management's Discussion
and Analysis of Financial Condition and Results of Operations"(the "MD&A"), contains forward-looking statements within the "safe harbor"
provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements in this report include, but are not limited to,
statements about our expectations, objectives, anticipations, plans, hopes, beliefs, intentions or strategies regarding the future.
Forward-looking statements represent our current expectations about future events, are based on assumptions, and involve risks and
uncertainties. If the risks or uncertainties occur or the assumptions prove incorrect, then our results may differ materially from those set forth
or implied by the forward-looking statements. Our forward-looking statements are not guarantees of future performance or events.
Words such as "expects," "anticipates," "aims," "projects," "intends," "plans," "believes," "estimates," "seeks," "continue," "could,"
"may," "potential," "should," "will," "would," variations of such words and similar expressions are also intended to identify such forward-looking
statements. These forward-looking statements are subject to risks, uncertainties and assumptions that are difficult to predict; therefore,
actual results may differ materially and adversely from those expressed in any forward-looking statement. Readers are directed to risks and
uncertainties identified under Part II, Item 1A, "Risk Factors,"and elsewhere in this report for factors that may cause actual results to be
different from those expressed in these forward-looking statements. Except as required by law, we undertake no obligation to revise or
update publicly any forward-looking statement for any reason.
Forward-looking statements in this report include, without limitation, statements about the following:
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•our belief that our PXoffers market-leading value with the highest technological and economic benefit;
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•our belief that leveraging our pressure exchanger technology will unlock new commercial opportunities in the future;
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•our belief that our PX G1300™can contribute to help make CO2-based refrigeration more economically viable in a broader
range of climates;
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•our belief that our technology helps our customer achieve environmentally sustainable operations;
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•our expectation that sales outside of the U.S.will remain a significant portion of our revenue;
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•the scale of the environmental impact from the use of our solutions;
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•the timing of our receipt of payment for products or services from our customers;
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•our belief that our existing cash and cash equivalents, our short and/or long-term investments, and the ongoing cash generated
from our operations, will be sufficient to meet our anticipated liquidity needs for the foreseeable future, with the exception of a
decision to enter into an acquisition and/or fund investments in our latest technology arising from rapid market adoption that
could require us to seek additional equity or debt financing;
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•our expectations relating to the amount and timing of recognized revenue from our projects;
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•our expectation that we will continue to receive a tax benefit related to U.S. federal foreign-derived intangible income and
research and development tax credit;
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•the outcome of proceedings, lawsuits, disputes and claims;
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•the impact of losses due to indemnification obligations;
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•other factors disclosed under the MD&A and Part I, Item 3, "Quantitative and Qualitative Disclosures about Market Risk," and
elsewhere in this Form 10-Q.
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You should not place undue reliance on these forward-looking statements. These forward-looking statements reflect management's
opinions only as of the date of the filing of this QuarterlyReport on Form 10-Q. All forward-looking statements included in this document are
subject to additional risks and uncertainties further discussed under Part II, Item 1A, "Risk Factors,"and are based on information available to
us as of May 7, 2025. We assume no obligation to update any such forward-looking statements. Certain risks and uncertainties could cause
actual results to differ materially from those projected in the forward-looking statements. These forward-looking statements are disclosed
from time to time in ourAnnual Reports on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K filed with, or
furnished to, the Securities and Exchange Commission (the "SEC"), as well as in Part II, Item 1A, "Risk Factors,"within this QuarterlyReport
on Form 10-Q.
Energy Recovery, Inc. | Q1'2025 Quarterly Report (Form 10-Q)| FLS 2
It is important to note that our actual results could differ materially from the results set forth or implied by our forward-looking
statements. The factors that could cause our actual results to differ from those included in such forward-looking statements are set forth
under the heading Item 1A, "Risk Factors," in our Quarterly Reports on Form 10-Q, in our Annual Reports on Form 10-K, and from time-to-
time, in our results disclosed in our Current Reports on Form 8-K. In addition, when preparing the MD&A below, we presume the readers
have access to and have read the MD&A in our Annual Report on Form 10-K, pursuant to Instruction 2 to paragraph (b) of Item 303 of
Regulation S-K.
We provide our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, Proxy Statements on
Schedule 14A, Forms 3, 4 and 5 filed by, or on behalf of, directors, executive officers and certain large shareholders, and any amendments to
those documents filed or furnished pursuant to the Securities Exchange Act of 1934, free of charge on the Investor Relations section of our
website, www.energyrecovery.com. These filings will become available as soon as reasonably practicable after such material is
electronically filed with or furnished to the SEC. From time to time, we may use our website as a channel of distribution of material company
information.
We also make available in the Investor Relations section of our website our corporate governance documents including our code of
business conduct and ethics and the charters of the audit, compensation and nominating and governance committees. These documents, as
well as the information on the website, are not intended to be part of this QuarterlyReport on Form 10-Q. We use the Investor Relations
section of our website as a means of complying with our disclosure obligations under Regulation FD. Accordingly, you should monitor the
Investor Relations section of our website in addition to following our press releases, SEC filings and public conference calls and webcasts.
Energy Recovery, Inc. | Q1'2025 Quarterly Report (Form 10-Q)| 1
PART I - FINANCIAL INFORMATION
Item 1 - Financial Statements (unaudited)
ENERGY RECOVERY, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
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March 31,
2025
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December 31,
2024
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||
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(In thousands)
|
|||
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ASSETS
|
|||
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Current assets:
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|||
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Cash and cash equivalents
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$49,137
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$29,627
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Short-term investments
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34,408
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48,392
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Accounts receivable, net
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32,389
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64,066
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Inventories, net
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32,410
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24,906
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Prepaid expenses and other assets
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6,248
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6,665
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Total current assets
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154,592
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173,656
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Long-term investments
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23,185
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21,832
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Deferred tax assets, net
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10,645
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9,004
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Property and equipment, net
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14,585
|
15,424
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Operating lease, right of use asset
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9,168
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9,695
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Goodwill
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12,790
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12,790
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Other assets, non-current
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429
|
391
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Total assets
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$225,394
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$242,792
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LIABILITIES AND STOCKHOLDERS' EQUITY
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|||
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Current liabilities:
|
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Accounts payable
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$3,404
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$3,109
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Accrued expenses and other liabilities
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11,272
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17,728
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Lease liabilities
|
2,357
|
2,020
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Contract liabilities
|
1,401
|
571
|
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Total current liabilities
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18,434
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23,428
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Lease liabilities, non-current
|
8,751
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9,297
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Other liabilities, non-current
|
96
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57
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Total liabilities
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27,281
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32,782
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Commitments and contingencies (Note 7)
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Stockholders' equity:
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|||
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Common stock
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67
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66
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Additional paid-in capital
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237,550
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235,010
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Accumulated other comprehensive income
|
75
|
98
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Treasury stock
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(135,405)
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(130,870)
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Retained earnings
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95,826
|
105,706
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|
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Total stockholders' equity
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198,113
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210,010
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|
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Total liabilities and stockholders' equity
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$225,394
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$242,792
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See Accompanying Notes to Condensed Consolidated Financial Statements
Energy Recovery, Inc. | Q1'2025 Quarterly Report (Form 10-Q)| 2
ENERGY RECOVERY, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
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Three Months Ended March 31,
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2025
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2024
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(In thousands, except per share data)
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Revenue
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$8,065
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$12,090
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Cost of revenue
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3,607
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4,955
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Gross profit
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4,458
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7,135
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Operating expenses:
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General and administrative
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8,574
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7,566
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Sales and marketing
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4,906
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6,152
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Research and development
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3,001
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4,351
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Restructuring charges
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539
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-
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Total operating expenses
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17,020
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18,069
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Loss from operations
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(12,562)
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(10,934)
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Other income (expense):
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|||
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Interest income
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1,073
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1,442
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Other non-operating income (expense), net
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6
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(53)
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Total other income, net
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1,079
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1,389
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Loss before income taxes
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(11,483)
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(9,545)
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Benefit from income taxes
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(1,603)
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(1,285)
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Net loss
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$(9,880)
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$(8,260)
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Net loss per share:
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Basic
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$ (0.18)
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$ (0.14)
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Diluted
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$ (0.18)
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$ (0.14)
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Number of shares used in per share calculations:
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Basic and diluted
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54,902
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57,102
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See Accompanying Notes to Condensed Consolidated Financial Statements
Energy Recovery, Inc. | Q1'2025 Quarterly Report (Form 10-Q)| 3
ENERGY RECOVERY, INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
|
Three Months Ended March 31,
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||||
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2025
|
2024
|
|||
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(In thousands)
|
|||
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Net loss
|
$(9,880)
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$(8,260)
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||
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Other comprehensive loss, net of tax
|
||||
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Foreign currency translation adjustments
|
(16)
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28
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||
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Unrealized loss on investments
|
(7)
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(44)
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||
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Total other comprehensive loss, net of tax
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(23)
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(16)
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||
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Comprehensive loss
|
$(9,903)
|
$(8,276)
|
||
See Accompanying Notes to Condensed Consolidated Financial Statements
Energy Recovery, Inc. | Q1'2025 Quarterly Report (Form 10-Q)| 4
ENERGYRECOVERY, INC.
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
|
|
Three Months Ended March 31,
|
|||
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2025
|
2024
|
||
|
|
(In thousands, except shares)
|
|||
|
Common stock
|
||||
|
Beginning balance
|
$66
|
$65
|
||
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Issuance of common stock, net
|
1
|
-
|
||
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Ending balance
|
67
|
65
|
||
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Additional paid-in capital
|
||||
|
Beginning balance
|
235,010
|
217,617
|
||
|
Issuance of common stock, net
|
615
|
1,190
|
||
|
Stock-based compensation
|
1,925
|
3,315
|
||
|
Ending balance
|
237,550
|
222,122
|
||
|
Accumulated other comprehensive income (loss)
|
||||
|
Beginning balance
|
98
|
(44)
|
||
|
Other comprehensive loss
|
||||
|
Foreign currency translation adjustments
|
(16)
|
28
|
||
|
Unrealized loss on investments
|
(7)
|
(44)
|
||
|
Total other comprehensive loss, net
|
(23)
|
(16)
|
||
|
Ending balance
|
75
|
(60)
|
||
|
Treasury stock
|
||||
|
Beginning balance
|
(130,870)
|
(80,486)
|
||
|
Common stock repurchased
|
(4,535)
|
-
|
||
|
Ending balance
|
(135,405)
|
(80,486)
|
||
|
Retained earnings
|
||||
|
Beginning balance
|
105,706
|
82,656
|
||
|
Net loss
|
(9,880)
|
(8,260)
|
||
|
Ending balance
|
95,826
|
74,396
|
||
|
Total stockholders' equity
|
$198,113
|
$216,037
|
||
|
Common stock issued (shares)
|
||||
|
Beginning balance
|
66,182,906
|
65,029,459
|
||
|
Issuance of common stock, net
|
350,146
|
448,455
|
||
|
Ending balance
|
66,533,052
|
65,477,914
|
||
|
Treasury stock (shares)
|
||||
|
Beginning balance
|
11,397,045
|
8,148,512
|
||
|
Common stock repurchased
|
279,295
|
-
|
||
|
Ending balance
|
11,676,340
|
8,148,512
|
||
|
Total common stock outstanding (shares)
|
54,856,712
|
57,329,402
|
||
See Accompanying Notes to Condensed Consolidated Financial Statements
Energy Recovery, Inc. | Q1'2025 Quarterly Report (Form 10-Q)| 5
ENERGY RECOVERY, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
|
Three Months Ended March 31,
|
||||
|
2025
|
2024
|
|||
|
(In thousands)
|
||||
|
Cash flows from operating activities:
|
||||
|
Net loss
|
$(9,880)
|
$(8,260)
|
||
|
Adjustments to reconcile net loss to cash provided by operating activities
|
||||
|
Stock-based compensation
|
1,963
|
3,283
|
||
|
Depreciation and amortization
|
962
|
1,029
|
||
|
Right of use asset amortization
|
464
|
431
|
||
|
Accretion (amortization) of discounts (premiums) on investments
|
(231)
|
(231)
|
||
|
Deferred income taxes
|
(1,641)
|
(1,328)
|
||
|
Impairment of long-lived assets
|
353
|
-
|
||
|
Other non-cash adjustments
|
21
|
116
|
||
|
Changes in operating assets and liabilities:
|
||||
|
Accounts receivable, net
|
31,677
|
21,882
|
||
|
Contract assets
|
378
|
-
|
||
|
Inventories, net
|
(7,645)
|
(5,723)
|
||
|
Prepaid and other assets
|
(37)
|
(545)
|
||
|
Accounts payable
|
176
|
1,140
|
||
|
Accrued expenses and other liabilities
|
(6,712)
|
(7,589)
|
||
|
Contract liabilities
|
830
|
2,292
|
||
|
Net cash provided by operating activities
|
10,678
|
6,497
|
||
|
Cash flows from investing activities:
|
||||
|
Maturities of marketable securities
|
27,224
|
16,534
|
||
|
Purchases of marketable securities
|
(14,369)
|
(20,783)
|
||
|
Capital expenditures
|
(191)
|
(824)
|
||
|
Proceeds from sales of fixed assets
|
10
|
87
|
||
|
Net cash provided by (used in) investing activities
|
12,674
|
(4,986)
|
||
|
Cash flows from financing activities:
|
||||
|
Net proceeds from issuance of common stock
|
616
|
1,190
|
||
|
Repurchase of common stock
|
(4,490)
|
-
|
||
|
Net cash (used in) provided by financing activities
|
(3,874)
|
1,190
|
||
|
Effect of exchange rate differences on cash and cash equivalents
|
33
|
(19)
|
||
|
Net change in cash, cash equivalents and restricted cash
|
19,511
|
2,682
|
||
|
Cash, cash equivalents and restricted cash, beginning of year
|
29,757
|
68,225
|
||
|
Cash, cash equivalents and restricted cash, end of period
|
$49,268
|
$70,907
|
||
See Accompanying Notes to Condensed Consolidated Financial Statements
Energy Recovery, Inc. | Q1'2025 Quarterly Report (Form 10-Q)| 6
ENERGY RECOVERY, INC.
NOTES TOCONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Note 1- Description of Business and Significant Accounting Policies
Energy Recovery, Inc. and its wholly-owned subsidiaries (the "Company" or "Energy Recovery") designs and manufactures reliable,
high-performance solutions that generate cost savings by increasing energy efficiency and reducing carbon emissions across several
industries. Leveraging the Company's pressure exchanger technology, which generates little to no emissions when operating, the Company
believes its solutions lower costs, save energy, reduce waste, and minimize emissions for companies across a variety of commercial and
industrial processes. As the world coalesces around the urgent need to address climate change and its impacts,the Company is helping
companies reduce their energy consumption in their industrial processes, which in turn, reduces their carbon footprint. The Company
believes that its customers do not have to sacrifice quality and cost savings for sustainability andthe Company is committed to developing
solutions that drive long-term value - both financial and environmental. The Company's solutions are marketed, sold in, and developed for,
the fluid-flow and gas markets, such as seawater and wastewater desalination, natural gas, chemical processing and CO2-based refrigeration
systems, under the trademarks ERI®, PX®, Pressure Exchanger®, PX®Pressure Exchanger®("PX"), Ultra PX™, PX G™, PX G1300®,
PX PowerTrain™, AT™, and Aquabold™. The Company owns, manufactures and/or develops its solutions, in whole or in part, in the United
States of America (the "U.S.").
Basis of Presentation
TheCondensed Consolidated Financial Statements include the accounts of Energy Recovery, Inc. and its wholly-owned subsidiaries.
All intercompany accounts and transactions have been eliminated in consolidation.
The accompanyingCondensed Consolidated Financial Statements have been prepared pursuant to the rules and regulations of the
Securities and Exchange Commission (the "SEC"). Certain information and footnote disclosures normally included in the financial statements
prepared in accordance with U.S. generally accepted accounting principles("GAAP") have been condensed or omitted pursuant to such rules
and regulations. The December 31, 2024Condensed Consolidated Balance Sheet was derived from audited financial statements and may
not include all disclosures required by GAAP; however, the Company believes that the disclosures are adequate to make the information
presented not misleading.
The March 31, 2025unauditedCondensed Consolidated Financial Statements should be read in conjunction with the audited
Consolidated Financial Statements and the notes thereto for the fiscal year ended December 31, 2024included in the Company's Annual
Report on Form 10-K filed with the SEC on February 26, 2025(the "2024 Annual Report").
The results of operations for the interim periods are not necessarily indicative of the operating results for the full fiscal year or any
future periods.
Energy Recovery, Inc. | Q1'2025 Quarterly Report (Form 10-Q)| 7
ENERGY RECOVERY, INC.
NOTES TOCONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Use of Estimates
The preparation ofCondensed Consolidated Financial Statements, in conformity with GAAP, requires the Company's management to
make judgments, assumptions and estimates that affect the amounts reported in theCondensed Consolidated Financial Statements and
accompanying notes.
The accounting policiesthat reflect the Company's significant estimates and judgments and that the Company believes are the most
critical to aid in fully understanding and evaluating its reported financial results are revenue recognition; stock-based compensation expense;
equipment useful life and valuation; goodwill valuation and impairment; inventory valuation and allowances, deferred taxes and valuation
allowances on deferred tax assets; and evaluation and measurement of contingencies. Those estimates could change, and as a result,
actual results could differ materially from those estimates.
The Company is not aware of any specific event or circumstance that would require an update to its estimates or judgments or a
revision of the carrying value of its assets or liabilities as of May 7, 2025, the date of issuance of this QuarterlyReport on Form 10-Q. These
estimates may change, as new events occur and additional information is obtained. Actual results could differ materially from these
estimates under different assumptions or conditions. The Company undertakes no obligation to publicly update these estimates for any
reason after the date of this QuarterlyReport on Form 10-Q, except as required by law.
Significant Accounting Policies
There have been no material changes to the Company's significant accounting policies in Note 1, "Description of Business and
Significant Accounting Policies- Significant Accounting Policies," of the Notes to Consolidated Financial Statements included in Item 8,
"Financial Statements and Supplementary Data," of the 2024 Annual Report. See Note 12, "Stock-Based Compensation - Performance
Restricted Stock Units" for further discussion regarding the Company's Performance Restricted Stock Units ("PRSUs") issued during the
three months ended March 31, 2025.
Recently Issued Accounting Pronouncement Not Yet Adopted
Therehave been no issued accounting pronouncements that have not yet been adopted during the three months ended March 31,
2025that apply to the Company other than the pronouncements disclosed in Note 1, "Description of Business and Significant Accounting
Policies- Recently Issued Accounting Pronouncement Not Yet Adopted," of the Notes to Consolidated Financial Statements included in Item
8, "Financial Statements and Supplementary Data," of the 2024 Annual Report.
Energy Recovery, Inc. | Q1'2025 Quarterly Report (Form 10-Q)| 8
ENERGY RECOVERY, INC.
NOTES TOCONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Note 2- Revenue
Disaggregation of Revenue
The following table presents the disaggregated revenues by segment, and within each segment,by geographical marketbased on the
customer "shipped to" address, and by channelcustomers. Sales and usage-based taxes are excluded from revenues. See Note 9,
|
Three Months Ended March 31, 2025
|
Three Months Ended March 31, 2024
|
|||||||||||
|
Water
|
Emerging
Technologies
|
Total
|
Water
|
Emerging
Technologies
|
Total
|
|||||||
|
(In thousands)
|
||||||||||||
|
Geographical market
|
||||||||||||
|
Asia1
|
$3,438
|
$-
|
$3,438
|
$1,979
|
$-
|
$1,979
|
||||||
|
Middle East and Africa
|
2,880
|
1
|
2,881
|
4,785
|
1
|
4,786
|
||||||
|
Europe
|
1,075
|
-
|
1,075
|
1,386
|
-
|
1,386
|
||||||
|
Americas
|
671
|
-
|
671
|
3,939
|
-
|
3,939
|
||||||
|
Total revenue
|
$8,064
|
$1
|
$8,065
|
$12,089
|
$1
|
$12,090
|
||||||
|
Channel
|
||||||||||||
|
Aftermarket
|
$4,027
|
$1
|
$4,028
|
$4,643
|
$1
|
$4,644
|
||||||
|
Original equipment manufacturer
|
4,001
|
-
|
4,001
|
3,346
|
-
|
3,346
|
||||||
|
Megaproject
|
36
|
-
|
36
|
4,100
|
-
|
4,100
|
||||||
|
Total revenue
|
$8,064
|
$1
|
$8,065
|
$12,089
|
$1
|
$12,090
|
||||||
1Within the Asia market, India represented revenue of $1,456, or 18%of total revenue during the three months ended March 31, 2025.
Contract Balances
The following table presents contract balances by category.
|
March 31,
2025
|
December 31,
2024
|
|||
|
(In thousands)
|
||||
|
Accounts receivable, net
|
$32,389
|
$64,066
|
||
|
Contract assets, current (included in prepaid expenses and other assets)
|
$2,398
|
$2,776
|
||
|
Contract liabilities:
|
||||
|
Contract liabilities, current
|
$1,401
|
$571
|
||
|
Total contract liabilities
|
$1,401
|
$571
|
||
Energy Recovery, Inc. | Q1'2025 Quarterly Report (Form 10-Q)| 9
ENERGY RECOVERY, INC.
NOTES TOCONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Contract Liabilities
The Company records contract liabilities, which consist of customer deposits and deferred revenue, when cash payments are
received in advance of the Company's performance. The following table presents the changein contract liability balances during the reported
periods.
|
March 31,
2025
|
December 31,
2024
|
||
|
(In thousands)
|
|||
|
Contract liabilities, beginning of year
|
$571
|
$1,187
|
|
|
Revenue recognized
|
(34)
|
(1,085)
|
|
|
Cash received, excluding amounts recognized as revenue during the period
|
864
|
469
|
|
|
Contract liabilities, end of period
|
$1,401
|
$571
|
|
RemainingPerformance Obligations
As of March 31, 2025, the following table presents the revenue that is expected to be recognized related to performance obligations
that are unsatisfied or partially unsatisfied.
|
Period
|
Remaining
Performance
Obligations
|
||
|
(In thousands)
|
|||
|
2025 (remaining nine months)
|
$5,101
|
||
|
2026
|
3,418
|
||
|
Total
|
$8,519
|
Energy Recovery, Inc. | Q1'2025 Quarterly Report (Form 10-Q)| 10
ENERGY RECOVERY, INC.
NOTES TOCONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Note 3- Net Loss Per Share
Net lossfor the reported period is divided by the weighted average number of basicand diluted common shares outstanding during
the reported period to calculate the basic and diluted net loss per share, respectively. Outstanding stock options to purchase common
shares,unvested restricted stock units ("RSUs"), and unvested performance restricted stock units ("PRSUs") are collectively referred to as
"equity awards."
•Basic net loss per share is computed using the weighted average number of common shares outstanding during the period.
•Diluted net loss per share is computed using the weighted average number of common and potentially dilutive shares
outstanding during the period, using the treasury stock method. Any anti-dilutive effect of equity awards outstanding is not
included in the computation of diluted net loss per share.
The following table presentsthe computation of basic and diluted net loss per share.
|
Three Months Ended March 31,
|
||||
|
2025
|
2024
|
|||
|
(In thousands, except per share amounts)
|
||||
|
Numerator
|
||||
|
Net loss
|
$(9,880)
|
$(8,260)
|
||
|
Denominator (weighted average shares)
|
||||
|
Basic and dilutive common shares outstanding
|
54,902
|
57,102
|
||
|
Net loss per share
|
||||
|
Basic
|
$ (0.18)
|
$ (0.14)
|
||
|
Diluted
|
$ (0.18)
|
$ (0.14)
|
||
The following table presentsthe equity awards that are excluded from diluted net loss per sharebecause their effect would have been
anti-dilutive.
|
|
Three Months Ended March 31,
|
||
|
|
2025
|
2024
|
|
|
(In thousands)
|
|||
|
Anti-dilutive equity award shares
|
2,806
|
3,286
|
|
Energy Recovery, Inc. | Q1'2025 Quarterly Report (Form 10-Q)| 11
ENERGY RECOVERY, INC.
NOTES TOCONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Note 4- Other Financial Information
Cash, Cash Equivalents and Restricted Cash
TheCondensed Consolidated Statements of Cash Flows explain the changes in the total of cash, cash equivalents and restricted
cash, such as cash amounts deposited in restricted cash accounts in connection with the Company's credit cards. The following table
presents a reconciliation of cash, cash equivalents and restricted cash, reported for each period within theCondensed Consolidated Balance
|
March 31,
2025
|
December 31,
2024
|
||
|
(In thousands)
|
|||
|
Cash and cash equivalents
|
$49,137
|
$29,627
|
|
|
Restricted cash, non-current (included in other assets, non-current)
|
131
|
130
|
|
|
Total cash, cash equivalents and restricted cash
|
$49,268
|
$29,757
|
|
Accounts Receivable, net
|
|
March 31,
2025
|
December 31,
2024
|
|
|
(In thousands)
|
|||
|
Accounts receivable, gross
|
$32,610
|
$64,287
|
|
|
Allowance for doubtful accounts
|
(221)
|
(221)
|
|
|
Accounts receivable, net
|
$32,389
|
$64,066
|
|
Inventories, net
Inventory amounts are stated at the lower of cost or net realizable value, using the first-in, first-out method.
|
|
March 31,
2025
|
December 31,
2024
|
|
|
(In thousands)
|
|||
|
Raw materials
|
$9,644
|
$8,829
|
|
|
Work in process
|
8,054
|
6,417
|
|
|
Finished goods
|
15,582
|
10,463
|
|
|
Inventories, gross
|
33,280
|
25,709
|
|
|
Valuation adjustments for excess and obsolete inventory
|
(870)
|
(803)
|
|
|
Inventories, net
|
$32,410
|
$24,906
|
|
AccruedExpenses and Other Liabilities
|
|
March 31,
2025
|
December 31,
2024
|
|
|
(In thousands)
|
|||
|
Accrued expenses and other liabilities, current
|
|||
|
Payroll, incentives and commissions payable
|
$4,932
|
$10,179
|
|
|
Warranty reserve
|
1,002
|
1,090
|
|
|
Restructuring accrual
|
1,029
|
2,476
|
|
|
Income taxes payable
|
958
|
947
|
|
|
Other accrued expenses and other liabilities
|
3,351
|
3,036
|
|
|
Total accrued expenses and other liabilities
|
11,272
|
17,728
|
|
|
Other liabilities, non-current
|
96
|
57
|
|
|
Total accrued expenses, and current and non-current other liabilities
|
$11,368
|
$17,785
|
|
Energy Recovery, Inc. | Q1'2025 Quarterly Report (Form 10-Q)| 12
ENERGY RECOVERY, INC.
NOTES TOCONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Restructuring
During the fourthquarter of fiscal year 2024, the Companyimplemented a restructuring plan which includedreductions in its
workforcein all functions of the organization, primarily inits San Leandro location, in order to lowerthe Company's operating cost structure,
and to positionthe Company for profitable growth. The Company recordeda restructuring charge of approximately $3.0 million. This charge
relates to severance and benefits, including reemployment assistance, for 38 terminated employees, which was approximately 15% ofthe
Company's workforce. Theimplementation of the restructuring plan was substantially complete by the end of the first quarter of fiscal year
2025 and the Company does not expect to incur significant additional expenses related to the restructuring. All expenses associated withthe
Company's restructuring plan are included in"Restructuring charges" in theCondensed Consolidated Statements of Operations.
|
|
Segment
|
Corporate
|
Total Expense
|
|||||
|
|
Water
|
Emerging
Technology
|
||||||
|
(In thousands)
|
||||||||
|
Amount recognized in 2024
|
1,147
|
832
|
497
|
2,476
|
||||
|
Amount recognized in 2025
|
210
|
123
|
206
|
539
|
||||
|
Total restructuring expenses recognized
|
$1,357
|
$955
|
$703
|
$3,015
|
||||
The following table presents the change in the Company's restructuring accrual balances during the reported period:
|
Severance and
Benefits
|
|
|
(In thousands)
|
|
|
Balance, as of December 31, 2024
|
$2,476
|
|
Restructuring provision
|
539
|
|
Cash paid
|
(1,986)
|
|
Balance, as of March 31, 2025
|
$1,029
|
Energy Recovery, Inc. | Q1'2025 Quarterly Report (Form 10-Q)| 13
ENERGY RECOVERY, INC.
NOTES TOCONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Note 5- Investments and Fair Value Measurements
Fair Value of Financial Instruments
The following table presents the Company's financial assets measured on a recurring basis by contractual maturity, including pricing
category, amortized cost, gross unrealized gains and losses, and fair value. As of March 31, 2025and December 31, 2024, the Company
had nofinancial liabilities and no Level3 financial assets.
|
March 31, 2025
|
December 31, 2024
|
||||||||||||||||
|
Pricing
Category
|
Amortized
Cost
|
Gross
Unrealized
Gains
|
Gross
Unrealized
Losses
|
Fair
Value
|
Amortized
Cost
|
Gross
Unrealized
Gains
|
Gross
Unrealized
Losses
|
Fair
Value
|
|||||||||
|
(In thousands)
|
|||||||||||||||||
|
Cash equivalents
|
|||||||||||||||||
|
Money market
securities
|
Level 1
|
$5,560
|
$-
|
$-
|
$5,560
|
$2,580
|
$-
|
$-
|
$2,580
|
||||||||
|
U.S. treasury
securities
|
Level 2
|
5,498
|
-
|
-
|
5,498
|
-
|
-
|
-
|
-
|
||||||||
|
Total cash equivalents
|
11,058
|
-
|
-
|
11,058
|
2,580
|
-
|
-
|
2,580
|
|||||||||
|
Short-term investments
|
|||||||||||||||||
|
U.S. treasury
securities
|
Level 2
|
17,380
|
17
|
-
|
17,397
|
20,303
|
42
|
-
|
20,345
|
||||||||
|
Corporate notes and
bonds
|
Level 2
|
16,970
|
41
|
-
|
17,011
|
27,995
|
52
|
-
|
28,047
|
||||||||
|
Total short-term investments
|
34,350
|
58
|
-
|
34,408
|
48,298
|
94
|
-
|
48,392
|
|||||||||
|
Long-term investments
|
|||||||||||||||||
|
U.S. treasury
securities
|
Level 2
|
3,510
|
13
|
-
|
3,523
|
999
|
1
|
-
|
1,000
|
||||||||
|
Corporate notes and
bonds
|
Level 2
|
14,598
|
66
|
-
|
14,664
|
18,983
|
65
|
(13)
|
19,035
|
||||||||
|
Municipal and
agency notes and
bonds
|
Level 2
|
4,999
|
-
|
(1)
|
4,998
|
1,799
|
-
|
(2)
|
1,797
|
||||||||
|
Total long-term investments
|
23,107
|
79
|
(1)
|
23,185
|
21,781
|
66
|
(15)
|
21,832
|
|||||||||
|
Total short and long-term
investments
|
57,457
|
137
|
(1)
|
57,593
|
70,079
|
160
|
(15)
|
70,224
|
|||||||||
|
Total
|
$68,515
|
$137
|
$(1)
|
$68,651
|
$72,659
|
$160
|
$(15)
|
$72,804
|
|||||||||
The following table presents a summary of the fair value and gross unrealized losses on the available-for-sale securities that have
been in a continuous unrealized loss position, aggregated by type of investment instrument. The available-for-sale securities that were in an
unrealized gain position have been excluded from the table.
|
|
March 31, 2025
|
December 31, 2024
|
|||||
|
|
Fair
Value
|
Gross
Unrealized
Losses
|
Fair
Value
|
Gross
Unrealized
Losses
|
|||
|
(In thousands)
|
|||||||
|
Corporate notes and bonds
|
-
|
-
|
7,569
|
(13)
|
|||
|
Municipal and agency notes and bonds
|
3,997
|
(1)
|
1,797
|
(2)
|
|||
|
Total available-for-sale investments with unrealized loss positions
|
$3,997
|
$(1)
|
$9,366
|
$(15)
|
|||
Energy Recovery, Inc. | Q1'2025 Quarterly Report (Form 10-Q)| 14
ENERGY RECOVERY, INC.
NOTES TOCONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Note 6- Lines of Credit
Credit Agreement
The Company enteredinto a credit agreement with JPMorgan Chase Bank, N.A.("JPMC") on December 22, 2021(as amended, the
"Credit Agreement"). The Credit Agreement, which will expire on December 21, 2026, provides a committed revolving credit line of
$50.0 millionand includes both a revolving loan and a letters of credit ("LCs") component.
Under the Credit Agreement, as of March 31, 2025, there were norevolving loans outstanding. In addition, under the LCs
component, the Company utilized $15.7 millionof the maximum allowable credit line of $30.0 million, which includes newly issued LCsand
previously issued and unexpired stand-by letters of credit ("SBLCs").
Letters of Credit
The following table presents the total outstanding LCsand SBLCs issued by the Company to its customers related to product
warranty and performance guarantees.
|
March 31,
2025
|
December 31,
2024
|
||
|
(In thousands)
|
|||
|
Outstanding letters of credit
|
$15,675
|
$15,708
|
|
Energy Recovery, Inc. | Q1'2025 Quarterly Report (Form 10-Q)| 15
ENERGY RECOVERY, INC.
NOTES TOCONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Note 7- Commitments and Contingencies
Sublease
On March 10, 2025, the Companyentered into an agreement to sublease its Katy, Texas operating lease. The sublease commenced
on March 10, 2025and will expire on December 31, 2029. The sublease is classified as an operating lease and has a remaining lease term
of 4.75years as of March 31, 2025. Subleaseincome was immaterial during the three months ended March 31, 2025and is recorded as a
reduction of lease expense in general and administrative within the Company'sCondensed Consolidated Statements of Operations.
The Company considered the sublease to be an indicator of impairment of the original lease. The Company compared the
undiscounted cash flows from the sublease to the carrying value of the Katy, Texas operating lease, which included the associated right-of-
use asset and leasehold improvements. The Company concluded that the carrying value was not recoverable as it exceeded the estimated
undiscounted cash flows.
The Company calculated the impairment charge by comparing the carrying value of the Katy, Texas operating lease to its fair value,
which was calculated based on the net discounted cash flows associated with the sublease. The Company recorded a total impairment
charge of $0.4 million, of which $0.2million and $0.2million was recorded against the right-of-use asset and the associated leasehold
improvements, respectively. The allocation of the impairment charge was based on the relative carrying valueof the assets. The impairment
charge was recorded in general and administrative within the Company'sCondensed Consolidated Statements of Operations.
Litigation
From time-to-time, the Company has been named in and subject to various proceedings and claims in connection with its business.
The Company may in the future become involved in litigation in the ordinary course of business, including litigation that could be material to
its business. The Company considers all claims, if any, on a quarterly basis and, based on known facts, assesses whether potential losses
are considered reasonably possible, probable and estimable. Based upon this assessment, the Company then evaluates disclosure
requirements and whether to accrue for such claims in its consolidated financial statements. The Company records a provision for a liability
when it is both probable that a liability has been incurred and the amount of the loss can be reasonably estimated. These provisions are
reviewed at least quarterly and are adjusted to reflect the impacts of negotiations, settlements, rulings, advice of legal counsel and other
information and events pertaining to a particular case. As of March 31, 2025, the Company was not involved in any lawsuits, legal
proceedings or claims that would have a material effect on the Company's financial position, results of operations, or cash flows. Therefore,
there were no material losses which were probable or reasonably possible.
Energy Recovery, Inc. | Q1'2025 Quarterly Report (Form 10-Q)| 16
ENERGY RECOVERY, INC.
NOTES TOCONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Note 8- Income Taxes
|
|
Three Months Ended March 31,
|
||
|
|
2025
|
2024
|
|
|
(In thousands, except percentages)
|
|||
|
Benefit from income taxes
|
$(1,603)
|
$(1,285)
|
|
|
Discrete items
|
52
|
76
|
|
|
Benefit from income taxes, excluding discrete items
|
$(1,551)
|
$(1,209)
|
|
|
Effective tax rate
|
14.0%
|
13.5%
|
|
|
Effective tax rate, excluding discrete items
|
13.5%
|
12.7%
|
|
The Company's interim period tax benefit from income taxes is determined using an estimate ofits annual effective tax rate, adjusted
for discrete items, if any, that arise during the period. Each quarter,the Company updates its estimate of the annual effective tax rate, and if
the estimated annual effective tax rate changes,the Company makes a cumulative adjustment in such period. The Company's quarterly tax
provision and estimate ofits annual effective tax rate are subject to variation due to several factors, including variability in accurately
predictingits pre-tax income or loss and the mix of jurisdictions to which they relate, the applicability of special tax regimes, and changes in
howthe Company does business.
For the three months ended March 31, 2025, the recognized benefit from income taxes resulted from the tax projection based on the
full year forecasted profit and included benefitsrelated to the U.S. federal foreign-derived intangible income ("FDII"), federalresearch and
development ("R&D") tax credit, certain permanent differences, such as stock-based compensation shortfalls, and partial release of California
valuation allowance.
For the three months ended March 31, 2024, the recognized benefit from income taxes resulted from the loss for the quarter and
included benefits related to the U.S. FDII and federal R&D tax credit, partially offset by certain permanent differences, such as share-based
compensation.
The effective tax rate excluding discrete items for the three months ended March 31, 2025, as compared to the prior year, differed
primarily due to lower projected R&D tax credits, increased non-deductible officer stock-based compensation, and lower projected U.S. FDII
benefits.
Energy Recovery, Inc. | Q1'2025 Quarterly Report (Form 10-Q)| 17
ENERGY RECOVERY, INC.
NOTES TOCONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Note 9- Segment Reporting
The Company's Chief Operating Decision-Maker ("CODM") is its President and Chief Executive Officer. The Company continues to
monitor and reviewits segment reporting structure in accordance with authoritative guidance to determine whether any changes have
occurred that would impactits reportable segments.
Thefollowing table presentsa summary of the Company's financial information by segment, including significant segment expenses,
and corporate operating expenses.
|
Three Months Ended March 31, 2025
|
Three Months Ended March 31, 2024
|
||||||||||||||
|
Water
|
Emerging
Technologies
|
Corporate
|
Total
|
Water
|
Emerging
Technologies
|
Corporate
|
Total
|
||||||||
|
(In thousands)
|
|||||||||||||||
|
Revenue
|
$8,064
|
$1
|
$-
|
$8,065
|
$12,089
|
$1
|
$-
|
$12,090
|
|||||||
|
Cost of revenue
|
3,561
|
46
|
-
|
3,607
|
4,954
|
1
|
-
|
4,955
|
|||||||
|
Gross profit (loss)
|
4,503
|
(45)
|
-
|
4,458
|
7,135
|
-
|
-
|
7,135
|
|||||||
|
Operating expenses
|
|||||||||||||||
|
General and
administrative
|
1,573
|
755
|
6,246
|
8,574
|
1,922
|
1,018
|
4,626
|
7,566
|
|||||||
|
Sales and marketing
|
3,145
|
1,270
|
491
|
4,906
|
3,745
|
1,807
|
600
|
6,152
|
|||||||
|
Research and
development
|
1,178
|
1,823
|
-
|
3,001
|
1,100
|
3,251
|
-
|
4,351
|
|||||||
|
Restructuring charges
|
210
|
123
|
206
|
539
|
-
|
-
|
-
|
-
|
|||||||
|
Total operating
expenses
|
6,106
|
3,971
|
6,943
|
17,020
|
6,767
|
6,076
|
5,226
|
18,069
|
|||||||
|
Operating income (loss)
|
$(1,603)
|
$(4,016)
|
$(6,943)
|
$(12,562)
|
$368
|
$(6,076)
|
$(5,226)
|
$(10,934)
|
|||||||
Energy Recovery, Inc. | Q1'2025 Quarterly Report (Form 10-Q)| 18
ENERGY RECOVERY, INC.
NOTES TOCONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Note 10- Concentrations
Customer Revenue Concentration
The following table presentsthe customers that account for 10% or more of the Company's revenueand their related segment for
each of the periods presented. Although certain customers might account for greater than 10% of the Company's revenueat any one point in
time, the concentration of revenuebetween a limited number of customers shifts regularly, depending on when revenue is recognized. The
percentages by customer reflect specific relationships or contracts that would concentrate revenuefor the periods presented and do not
indicate a trend specific to any one customer.
|
Three Months Ended March 31,
|
||||||
|
|
Segment
|
2025
|
2024
|
|||
|
Customer A
|
Water
|
12%
|
**
|
|||
|
Customer B
|
Water
|
**
|
18%
|
|||
|
Customer C
|
Water
|
**
|
13%
|
|||
**Zero or less than 10%.
Energy Recovery, Inc. | Q1'2025 Quarterly Report (Form 10-Q)| 19
ENERGY RECOVERY, INC.
NOTES TOCONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Note 11- Stockholders' Equity
Share Repurchase Program
The Company's Board, from time-to-time, has authorized a share repurchase program under which the Company may, at the
discretion of management, repurchaseits outstanding common stock in the open market, or in privately negotiated transactions, in
compliance with applicable state and federal securities laws. The timing and amounts of any purchase under the Company's share
repurchase program is based on market conditions and other factors including price, regulatory requirements, and capital availability. The
Company accounts for stock repurchases under these programs using the cost method. As of March 31, 2025, the Company has
repurchased 11.7 million shares of its common stock at an aggregate cost of $135.0 millionunder all share repurchase programs.
February 2025 Authorization
On February 26, 2025, the Company announced that the Board authorized a share repurchase program under which the Company
may repurchase its outstanding common stock, at the discretion of management, for up to $30.0 millionin aggregate cost, which included
both the share value of the acquired common stock and the fees charged in connection with acquiring the common stock (the "February 2025
Authorization"). The February 2025 Authorization will expire in February 2026.
The following table presents the share repurchase activities under the February 2025 Authorizationas of March 31, 2025.
|
Number of Shares
Purchased
|
Average Price Paid
per Share(1)
|
Plan Activity
|
|||||
|
(In millions)
|
|||||||
|
February 2025 Authorization
|
$30.0
|
||||||
|
Repurchases under February 2025 Authorization
|
279,295
|
$16.07
|
(4.5)
|
||||
|
Remaining amount under February 2025 Authorization
|
$25.5
|
(1) Excluding commissions
Energy Recovery, Inc. | Q1'2025 Quarterly Report (Form 10-Q)| 20
ENERGY RECOVERY, INC.
NOTES TOCONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Note 12- Stock-based Compensation
Performance Restricted Stock Units
On January 23, 2025, the Compensation Committee of the Board adopted a new form of PRSU award agreement under the 2020
Equity Incentive Plan (the "2020 Plan"), to among other things, define the terms of the performance metrics and performance period for such
PRSUs. During the three months ended March 31, 2025, the Company granted 287,298PRSUs.
PRSUsoutstanding at March 31, 2025generally vest over 3 yearsand are dependent upon continued employment and meeting
certain cumulative revenue and cumulative adjusted EBITDA targets. Adjusted EBITDA is a non-GAAP financial measure that the Company
defines as net losswhich excludes i) depreciation and amortization; ii) stock-based compensation; iii) executive transition costs; iv)
restructuring charges; v) impairment of long-lived assets; vi) other income, net, such as interest incomeand other non-operating income
(expense), net; and vii) benefit from income taxes. As PRSUs vest, the units will be settled in shares of common stock. The number of
potential shares issued based on PRSUs granted during the three months ended March 31, 2025is dependent on the level of achievement of
the performance targets discussed above, which ranges from 0shares to up to 863,298shares of common stock. The units are valued
based on the Company's market price on the date of grant. As of March 31, 2025, no expense has been recognized in relation to the PRSUs
as the performance conditions are not considered probable.
Energy Recovery, Inc. | Q1'2025 Quarterly Report (Form 10-Q)| 21
Item 2 - Management's Discussion and Analysis of Financial Condition and Results of
Operations
Overview
Energy Recovery, Inc. (the "Company", "Energy Recovery", "we", "our" and "us") designs and manufactures solutions that make
industrial processes more efficient and sustainable. Leveraging our pressure exchanger technology, which generates little to no emissions
when operating, we believe our solutions lower costs, save energy, reduce waste, and minimize emissions for companies across a variety of
commercial and industrial processes. As the world coalesces around the urgent need to address climate change and its impacts,we are
helping companies reduce their energy consumption in their industrial processes, which in turn, reduces their carbon footprint. We believe
that our customers do not have to sacrifice quality and cost savings for sustainability andwe are committed to developing solutions that drive
long-term value - both financial and environmental.
The original product application of our technology, the PX®Pressure Exchanger®("PX") energy recovery device, was a major
contributor to the advancement of seawater reverse osmosis desalination("SWRO"), significantly lowering the energy intensity and cost of
water production globally from SWRO. Our pressure exchanger technologyis being applied to the wastewaterfiltration market, such as
battery manufacturers, mining operations, municipalities, and other manufacturing plants that discharge wastewater with significant levels of
metals and pollutants, and has also been applied to the development of our PX G1300®for use in the CO2market.
Engineering, and research and development("R&D"), have been, and remain, an essential part of our history, culture and corporate
strategy. Since our formation, we have developed leading technology and engineering expertise through the continual evolution of our
pressure exchanger technology, which can enhance environmental sustainability and improve productivity by reducing waste and energy
consumption in high-pressure industrial fluid-flow systems. This versatile technology works as a platform to build product applications and is
at the heart of many of our products. In addition, we have engineered and developed ancillary devices, such as our hydraulic turbochargers
and circulation "booster" pumps, that complement our energy recovery devices.
Segments
Our reportable operating segments consist of the water and emerging technologies segments. These segments are based on the
industries in which the technology solutions are sold, the type of energy recovery device or other technology sold and the related solution and
service or, in the case of emerging technologies, where revenues from new and/or potential devices utilizing our pressure exchanger
technology can be brought to market. Other factors for determining the reportable operating segments include the manner in which our Chief
Operating Decision Maker ("CODM"), our President and Chief Executive Officer, evaluates our performance combined with the nature of the
individual business activities. In addition, our corporate operating expenses include expenditures in support of the water and emerging
technologies segments. We continueto monitor and reviewour segment reporting structure in accordance with authoritative guidance to
determine whether any changes have occurred that would impactour reportable segments.
Energy Recovery, Inc. | Q1'2025 Quarterly Report (Form 10-Q)| 22
Results of Operations
A discussion regarding our financial condition and results of operations for the three months ended March 31, 2025, compared to the
three months ended March 31, 2024, is presented below.
Revenue
As a significant portion of our revenue is derived from large project contract deliveries that are between 16 to 36 months from contract
date, variability in revenue from quarter to quarter is typical, therefore year-on-year comparisons are not necessarily indicative of the trend for
the full year due to these variations. There is no specific seasonality in our revenues to highlight.
Revenue by Channel Customers
|
Three Months Ended March 31,
|
|||||||||||
|
2025
|
2024
|
||||||||||
|
Revenue
|
% of
Revenue
|
Revenue
|
% of
Revenue
|
Change
|
|||||||
|
(In thousands, except percentages)
|
|||||||||||
|
Aftermarket
|
$4,028
|
50%
|
$4,644
|
38%
|
$(616)
|
(13%)
|
|||||
|
Original equipment manufacturer
|
4,001
|
50%
|
3,346
|
28%
|
655
|
20%
|
|||||
|
Megaproject
|
36
|
-%
|
4,100
|
34%
|
(4,064)
|
(99%)
|
|||||
|
Total revenue
|
$8,065
|
100%
|
$12,090
|
100%
|
$(4,025)
|
(33%)
|
|||||
Revenue Attributable to Primary Geographical Markets by Segments
|
Three Months Ended March 31,
|
|||||||||||
|
2025
|
2024
|
||||||||||
|
Water
|
Emerging
Technologies
|
Total
|
Water
|
Emerging
Technologies
|
Total
|
||||||
|
(In thousands)
|
|||||||||||
|
Asia1
|
$3,438
|
$-
|
$3,438
|
$1,979
|
$-
|
$1,979
|
|||||
|
Middle East and Africa
|
2,880
|
1
|
2,881
|
4,785
|
1
|
4,786
|
|||||
|
Europe
|
1,075
|
-
|
1,075
|
1,386
|
-
|
1,386
|
|||||
|
Americas
|
671
|
-
|
671
|
3,939
|
-
|
3,939
|
|||||
|
Total revenue
|
$8,064
|
$1
|
$8,065
|
$12,089
|
$1
|
$12,090
|
|||||
1Within the Asia market, India represented revenue of $1,456, or 18%of total revenue during the three months ended March 31, 2025
Three months ended March 31, 2025, as compared to the three months ended March 31, 2024
The decreasein megaproject ("MPD") revenue of $4.1 millionwas due primarily to lower shipments to the Middle East and Africa
("MEA") and Americas as compared to the three months ended March 31, 2024.
The increasein original equipment manufacturer ("OEM") revenue of $0.7 million was primarily due to higher shipments to the Asia
and MEA markets, partially offset by lower shipments to the Americas and Europe markets.
The decreasein aftermarket ("AM") revenue of $0.6 millionwas due primarily to lower shipments to the America markets, partially
offset by higher shipments to the Asia market.
Concentration of Revenue
See Note 10, "Concentrations," of the Notes to Condensed Consolidated Financial Statements in Part I, Item 1, "Financial Statements
(unaudited)," of this Quarterly Report on Form 10-Q(the "Notes") for further discussion regarding our concentration of revenue.
Energy Recovery, Inc. | Q1'2025 Quarterly Report (Form 10-Q)| 23
Gross Profit and Gross Margin
Gross profitrepresents revenue less cost of revenue. Cost of revenue consists primarily of raw materials, personnel costs (including
stock-based compensation), manufacturing overhead, warranty costs, and depreciation expense.
|
|
Three Months Ended March 31,
|
||||
|
|
2025
|
2024
|
Change
|
||
|
(In thousands, except percentage and basis point)
|
|||||
|
Gross profit
|
$4,458
|
$7,135
|
$(2,677)
|
||
|
Gross margin
|
55.3%
|
59.0%
|
(370)bps
|
||
The decreasein gross profit and gross margin for the three months ended March 31, 2025, as compared to the prior year, was due
primarily tolower sales volume spread over fixed costsduring the three months ended March 31, 2025.
Operating Expenses
The total material changes of general and administrative ("G&A"), sales and marketing ("S&M") and research and development
("R&D") operating expenses for the three months ended March 31, 2025, as compared to the comparable period in the prior year, are
discussed within the following overall operating expenditures, and the segment and corporate operating expenses discussions below.
|
Three Months Ended March 31,
|
||||||||||||||||
|
2025
|
2024
|
|||||||||||||||
|
Water
|
Emerging
Technologies
|
Corporate
|
Total
|
Water
|
Emerging
Technologies
|
Corporate
|
Total
|
|||||||||
|
(In thousands)
|
||||||||||||||||
|
General and
administrative
|
$1,573
|
$755
|
$6,246
|
$8,574
|
$1,922
|
$1,018
|
$4,626
|
$7,566
|
||||||||
|
Sales and marketing
|
3,145
|
1,270
|
491
|
4,906
|
3,745
|
1,807
|
600
|
6,152
|
||||||||
|
Research and
development
|
1,178
|
1,823
|
-
|
3,001
|
1,100
|
3,251
|
-
|
4,351
|
||||||||
|
Restructuring charges
|
210
|
123
|
206
|
539
|
-
|
-
|
-
|
-
|
||||||||
|
Total operating
expenses
|
$6,106
|
$3,971
|
$6,943
|
$17,020
|
$6,767
|
$6,076
|
$5,226
|
$18,069
|
||||||||
Three months ended March 31, 2025, as compared to the three months ended March 31, 2024
Overall Operating Expenditures. Overall operating expenditures decreased by $1.0 million, or (5.8%). This decreasewas due
primarily to a decrease in employee costs, such as employee compensation and stock-based compensation, partially offset by restructuring
charges, and an increase in consulting costs. Changes in non-employee costs included:
•G&A: higher consulting costs related to the enhancement of our corporate strategy as well as $0.4 millionof impairment costs
associated with the sublease of our Katy, Texas lease.
•R&D: lower Emerging Technologies segment development costs.
WaterSegment. Watersegment operating expenses decreased by $0.7 million, or (9.8%). This decreasewas due primarily to lower
employee costs, including commission costs and stock-based compensation costs.
Emerging TechnologiesSegment. Emerging Technologiesoperating expenses decreased by $2.1 million, or (34.6%). This decrease
was due primarily to lower development costs and lower employee costs, primarily related to stock-based compensation.
Energy Recovery, Inc. | Q1'2025 Quarterly Report (Form 10-Q)| 24
Corporate Operating Expenses. Corporateoperating expenses increased by $1.7 million, or 32.9%. This increasewas due primarily
toincreasesin consulting, restructuring, and recruiting costs, as well as impairment costs associated with the sublease of the Katy, Texas
lease. The increase was partially offset by lower employee costs.
Restructuring Charges. During the fourthquarter of fiscal year 2024, weimplemented a restructuring plan which included reductions
in our workforce in all functions of the organization, primarily inour San Leandro location, in order to lowerour operating cost structure, and
to positionthe Company for profitable growth. We recorded a restructuring charge of $3.0 million, of which $0.5 millionwas recorded during
the first quarter of fiscal year 2025. This charge relates to severance and benefits, including reemployment assistance, for 38 terminated
employees, which was approximately 15% ofour workforce. The implementation of the restructuring plan was substantially complete by the
end of the first quarter of fiscal year 2025 and the Company does not expect to incur significant additional expenses related to the
restructuring. See Note 4, "Other Financial Information- Restructuring," of the Notes for further discussion and disclosure on our
Other Income, Net
|
|
Three Months Ended March 31,
|
||
|
|
2025
|
2024
|
|
|
(In thousands)
|
|||
|
Interest income
|
$1,073
|
$1,442
|
|
|
Other non-operating income (expense), net
|
6
|
(53)
|
|
|
Total other income, net
|
$1,079
|
$1,389
|
|
The decreasein "Total other income, net" in the three months ended March 31, 2025, as compared to the comparable period in the
prior year, was primarily due to adecrease inshort- and long-term investments.
Income Taxes
|
|
Three Months Ended March 31,
|
||
|
|
2025
|
2024
|
|
|
(In thousands, except percentages)
|
|||
|
Benefit from income taxes
|
$(1,603)
|
$(1,285)
|
|
|
Discrete items
|
52
|
76
|
|
|
Benefit from income taxes, excluding discrete items
|
$(1,551)
|
$(1,209)
|
|
|
Effective tax rate
|
14.0%
|
13.5%
|
|
|
Effective tax rate, excluding discrete items
|
13.5%
|
12.7%
|
|
The interim period tax benefit from income taxes is determined using an estimate ofour annual effective tax rate, adjusted for discrete
items, if any, that arise during the period. Each quarter,we update our estimate of the annual effective tax rate, and if the estimated annual
effective tax rate changes,we make a cumulative adjustment in such period. The quarterly tax provision and estimate ofour annual effective
tax rate are subject to variation due to several factors, including variability in accurately predictingour pre-tax income or loss and the mix of
jurisdictions to which they relate, the applicability of special tax regimes, and changes in howwe do business.
For the three months ended March 31, 2025, the recognized benefit from income taxes resulted from the tax projection based on the
full year forecasted profit and included benefitsrelated to the U.S. federal foreign-derived intangible income ("FDII"), federal R&D tax credit,
certain permanent differences, such as stock-based compensation shortfalls, and partial release of California valuation allowance.
For the three months ended March 31, 2024, the recognized benefit from income taxes resulted from the loss for the quarter and
included benefits related to the U.S. FDII and federal R&D tax credit, partially offset by certain permanent differences, such as share-based
compensation.
The effective tax rate excluding discrete items for the three months ended March 31, 2025, as compared to the prior year, differed
primarily due to lower projected R&D tax credits, increased non-deductible officer stock-based compensation, and lower projected U.S. FDII
benefits.
Energy Recovery, Inc. | Q1'2025 Quarterly Report (Form 10-Q)| 25
Liquidity and Capital Resources
Overview
From time-to-time, management and our Board of Directors (the "Board") review our liquidity and future cash needs and may make a
decision to (1) return capital to our shareholders through a share repurchase program or dividend payout; or (2) seek additional debt or equity
financing. As of March 31, 2025, our principal sources of liquidity consisted of (i) unrestricted cash and cash equivalents of $49.1 millionthat
are primarily invested in money market funds and U.S. treasury securities; (ii) investment-grade short-term and long-term marketable debt
instrumentsof $57.6 millionthat are primarily invested in U.S. treasury securities, corporate notes and bonds, and municipal and agency
notes and bonds; and (iii) accounts receivable, net of allowances, of $32.4 million. As of March 31, 2025, there was unrestricted cash of
$1.1 million held outside the U.S. We invest cash not needed for current operations predominantly in investment-grade, marketable debt
instruments with the intent to make such funds available for future operating purposes, as needed. Although these securities are available for
sale, we generally hold these securities to maturity, and therefore, do not currently see a need to trade these securities in order to support our
liquidity needs in the foreseeable future. We believe the risk of this portfolio to us is in the ability of the underlying companies or government
agencies to cover their obligations at maturity, not in our ability to trade these securities at a profit. Based on current projections, we believe
existing cash balances and future cash inflows from this portfolio will meet our liquidity needs for at least the next 12 months.
Credit Agreement
We entered into a credit agreement with JPMorgan Chase Bank, N.A.("JPMC") on December 22, 2021(as amended, the "Credit
Agreement"). The Credit Agreement, which will expire on December 21, 2026, provides a committed revolving credit line of $50.0 millionand
includes both a revolving loan and a letters of credit ("LCs") component. The maximum allowable LCsunder the credit line component ofthe
Credit Agreementis $30.0 million. As of March 31, 2025, we were in compliance with all covenants under the Credit Agreement.
Under the Credit Agreement, as of March 31, 2025, there were norevolving loans outstanding. In addition, as of March 31, 2025,
under the LCscomponent, we utilized $15.7 millionof the maximum allowable credit line of $30.0 million, which included newly issued LCs,
and previously issued and unexpired stand-by letters of credits ("SBLCs"). As of March 31, 2025, there was $15.7 millionof outstanding LCs.
These LCs had a weighted average remaining life of approximately 14 months.
Energy Recovery, Inc. | Q1'2025 Quarterly Report (Form 10-Q)| 26
Share Repurchase Program
The Board, from time-to-time, has authorized a share repurchase program under which we may, at our discretion, repurchase the
Company'soutstanding common stock in the open market, or in privately negotiated transactions, in compliance with applicable state and
federal securities laws. The timing and amounts of any purchase under the share repurchase programs are based on market conditions and
other factors including price, regulatory requirements, and capital availability. We account for stock repurchases under these programs using
the cost method. As of March 31, 2025, we have cumulatively repurchased 11.7 million shares of the Company's common stock at an
aggregate cost of $135.0 millionunder all closed share repurchase programs. The following is a discussion of the current share repurchase
program during the three months ended March 31, 2025. See Note 11, "Stockholders' Equity- Share Repurchase Program," of the Notesfor
On February 26, 2025, we announced that the Boardauthorized a share repurchase program under which we may repurchase our
outstanding common stock, at the discretion of management, up to $30.0 millionin aggregate cost, which includes both the share value of the
acquired common stock and the fees charged in connection with acquiring the common stock (the "February 2025 Authorization"). Webegan
repurchasing our outstanding common stock in March 2025. The February 2025 Authorization will expire in February 2026.
Energy Recovery, Inc. | Q1'2025 Quarterly Report (Form 10-Q)| 27
Cash Flows
|
Three Months Ended March 31,
|
|||||
|
2025
|
2024
|
Change
|
|||
|
|
(In thousands)
|
||||
|
Net cash provided by operating activities
|
$10,678
|
$6,497
|
$4,181
|
||
|
Net cash provided by (used in) investing activities
|
12,674
|
(4,986)
|
17,660
|
||
|
Net cash (used in) provided by financing activities
|
(3,874)
|
1,190
|
(5,064)
|
||
|
Effect of exchange rate differences on cash and cash equivalents
|
33
|
(19)
|
52
|
||
|
Net change in cash, cash equivalents and restricted cash
|
$19,511
|
$2,682
|
$16,829
|
||
Cash Flows from Operating Activities
Net cash provided by operating activitiesis subject to the project driven, non-cyclical nature of our business. Operating cash flow can
fluctuate significantly from reporting period to reporting period, due to the timing of receipts of large project orders. Operating cash flow may
be negative in one reporting period and significantly positive in the next, consequently individual reporting period resultsand comparisons
may not necessarily indicate a significant trend, either positive or negative.
The highernet cash provided byoperating assets and liabilities for the three months ended March 31, 2025, as compared to the prior
year, was due primarily to the following factors:
•Accounts receivable and contract assets:an increase in cash due to an increase in collections related to revenues earned late in
the fourth quarter of 2024; partially offset by
•Inventories: a decreasein cash due to cash usedto build finished goods inventory in the first quarter of 2025; and
•Net loss: an increase in net loss after excluding the effects of non-cash adjustments.
Cash Flows from Investing Activities
Net cash provided by (used in) investing activitiesprimarily relates to maturities and purchasesof investment-grade marketable debt
instruments, such as corporate notes and bonds, and capital expenditures supporting our growth. We believe our investments in marketable
debt instruments are structured to preserve principal and liquidity while at the same time maximizing yields without significantly increasing
risk. The increasein net cash provided byinvesting activities of $17.7 millionin the three months ended March 31, 2025, as compared to the
prior year, was primarily driven bylesscash used for purchases of marketable debt instruments, net of cash proceeds from maturities of
marketable debt instruments, of $17.1 millionand lower capital expenditures of $0.6 million.
Cash Flows from Financing Activities
Net cash used in financing activitiesfor the three months ended March 31, 2025was loweras compared to the cash provided by
financing activities in the prior year, due primarily to cashused for the repurchase of our common stock under the February 2025
Authorizationand a decrease in cash from exercises of employee stock options granted under our equity incentive plans.
Energy Recovery, Inc. | Q1'2025 Quarterly Report (Form 10-Q)| 28
Liquidity and Capital Resource Requirements
We believe that our existing resources and cash generated from our operations will be sufficient to meet our anticipated capital
requirements for at least the next 12 months. However, we may need to raise additional capital or incur additional indebtedness to continue
to fund our operations or to support acquisitions in the future and/or to fund investments in our latest technology arising from rapid market
adoption. These needs could require us to seek additional equity or debt financing. Our future capital requirements will depend on many
factors including the continuing market acceptance of our products, our rate of revenue growth, the timing of new product introductions, the
expansion of our R&D, manufacturing and S&M activities, and the timing and extent of our expansion into new geographic territories. In
addition, we may enter into potential material investments in, or acquisitions of, complementary businesses, services or technologies in the
future which could also require us to seek additional equity or debt financing. Should we need additional liquidity or capital funds, these funds
may not be available to us on favorable terms, or at all.
Recent Accounting Pronouncements
Refer to Note 1, "Description of Business and Significant Accounting Policies- Significant Accounting Policies," of the Notes to
Condensed Consolidated Financial Statements in Part I, Item 1, "Financial Statements (unaudited)," of this Quarterly Report on Form 10-Q.
Energy Recovery, Inc. | Q1'2025 Quarterly Report (Form 10-Q)| 29
Item 3 - Quantitative and Qualitative Disclosures About Market Risk
Our exposure to market risk may be found primarily in two areas, foreign currency and interest rates.
Foreign Currency Risk
Our foreign currency exposures are due to fluctuations in exchange rates for the U.S.dollar ("USD") versus the British pound, Saudi
riyal, Emirati dirham, European euro, Chinese yuan, Indian rupee and Canadian dollar. Changes in currency exchange rates could adversely
affect our consolidated operating results or financial position.
Our revenue contracts have been denominated in the USD. At times, our international customers may have difficulty obtaining
the USD to pay our receivables, thus increasing collection risk and potential bad debt expense. To the extent we expand our international
sales, a larger portion of our revenue could be denominated in foreign currencies. As a result, our cash and operating results could be
increasingly affected by changes in exchange rates.
In addition, we pay many vendors in foreign currency and, therefore, are subject to changes in foreign currency exchange rates. Our
international sales and service operations incur expense that is denominated in foreign currencies. This expense could be materially affected
by currency fluctuations. Our international sales and services operations also maintain cash balances denominated in foreign currencies. To
decrease the inherent risk associated with translation of foreign cash balances into our reporting currency, we do not maintain excess cash
balances in foreign currencies.
We have not hedged our exposure to changes in foreign currency exchange rates because expenses in foreign currencies have been
insignificant to date and exchange rate fluctuations have had little impact on our operating results and cash flows. In addition, we do not
have any exposure to the Russian ruble.
InterestRate and Credit Risks
The primary objective of our investment activities is to preserve principal and liquidity while at the same time maximizing yields without
significantly increasing risk. We invest primarily in investment-grade short-term and long-term marketable debt instrumentsthat are subject
to counter-party credit risk. To minimize this risk, we invest pursuant to an investment policy approved by the Board. The policy mandates
high credit rating requirements and restricts our exposure to any single corporate issuer by imposing concentration limits.
As of March 31, 2025, our investment portfolio of $63.1 million,in investment-grade marketable debt instruments, such as U.S.
treasury securities, corporate notes and bonds, and municipal and agency notes and bonds, are classified aseither cash equivalents or
short-term and/or long-term investmentson ourCondensed Consolidated Balance Sheets. These investments are subject to interest rate
fluctuations and decrease in market value to the extent interest rates increase, which occurred during the three months ended March 31,
2025. To minimize the exposure due to adverse shifts in interest rates, we maintain investments with a weighted average maturity of
approximately nine months. As of March 31, 2025, a hypothetical 1% increase in interest rates would have resulted in a less than
$0.3 million decreasein the fair value of our investments in marketable debt instruments as of such date.
Energy Recovery, Inc. | Q1'2025 Quarterly Report (Form 10-Q)| 30
Item 4 - Controls and Procedures
Evaluation of Disclosure Controls and Procedures
Our management, with the participation of our President and Chief Executive Officerand our Chief Financial Officer, have evaluated
the effectiveness of our disclosure controls and procedures as defined in Rule 13a-15(e) of the Securities Exchange Act of 1934 as of the
end of the period covered by this report.
Based on that evaluation, our President and Chief Executive Officerand our Chief Financial Officerhave concluded that, as of
March 31, 2025, our disclosure controls and procedures were effective.
Changesin Internal Controls
There were no changes in our internal control over financial reporting during the period covered by this report that have materially
affected, or are reasonably likely to materially affect, our internal control over financial reporting.
Energy Recovery, Inc. | Q1'2025 Quarterly Report (Form 10-Q)| 31
PART II - OTHER INFORMATION
Item 1 - Legal Proceedings
We have been, and may be from time to time, involved in legal proceedings or subject to claims incident to the ordinary course of
business. We are not presently a party to any legal proceedings that we believe are likely to have a material adverse effect on our business,
financial condition, or operating results. Regardless of the outcome, such proceedings or claims can have an adverse impact on us because
of defense and settlement costs, diversion of resources and other factors, and there can be no assurances that favorable outcomes will be
obtained.
Item 1A - Risk Factors
Except as noted below, there have been no material changes in our risk factors from those disclosed in Part I, Item 1A, "Risk Factors,"
in the 2024 Annual Report.
Changesin U.S. policy, including the imposition of or increases in tariffs, changes to existing trade agreements and any
resulting changes in international trade relations, such as reciprocal tariffs or trade wars, particularly with regard to China, may
have a material adverse impact on impact on our business, results of operations, or financial condition.
In January 2025, the global tariff landscape began to quickly change with the U.S. implementing new and/or increased tariffs on
various foreign countries, either generally or with respect to certain products. Certain foreign countries, including China have, and may
continue to, change their tariff policies in response to changes in the U.S. tariff policy.
These recent tariffs and the subsequent retaliatory tariffs could increase the cost of goods for our products or reduce our ability to sell
products globally, particularly in China, which may adversely affect our operating results and financial condition. So far, these new tariffs and
trade policies have not had a significant impact on our business operations and financial results, primarily due to our prior efforts to
accumulate and maintain inventories at favorable cost levels. However, there is no guarantee that we can avoid the impact of tariff and
related economic effects in the future, and these trade measures and retaliations may directly impact our business by increasing trade-related
costs or affecting the demand for our products globally, and specifically in China.
Any further unfavorable government policies on international trade, such as capital controls or tariffs, may affect the demand for our
products and services, impact the competitive position of our products or prevent us from selling products in certain countries. If any new
tariffs, legislation and/or regulations are implemented, or if existing trade agreements are renegotiated or, in particular, if the U.S. government
takes retaliatory trade actions due to the recent U.S.-China trade tension, such changes could have an adverse effect on our business,
financial condition and results of operations.
Item2 - Unregistered Sales of Equity Securities and Use of Proceeds
None.
Item 3 - Defaults Upon Senior Securities
None.
Item 4 - Mine Safety Disclosures
Not applicable.
Item 5 - Other Information
Energy Recovery, Inc. | Q1'2025 Quarterly Report (Form 10-Q)| 32
10b5-1 Plans
During the three months ended March 31, 2025, no director or officer(within the meaning of Rule 16a-1(f) under the Securities
Exchange Act of 1934, as amended) has adopted or terminateda Rule 10b5-1 trading arrangement (as defined in Item 408 of Regulation S-
K).
Form Equity Incentive Plan Agreement
On January 23, 2025, the Compensation Committee of the Board adopteda new form of performance restricted stock unit ("PRSU")
award agreement under the 2020 Equity Incentive Plan (the "2020 Plan"), to among other things, define the terms of the performance metrics
and performance period for such PRSUs.
Energy Recovery, Inc. | Q1'2025 Quarterly Report (Form 10-Q)| 33
Item 6 - Exhibits
A list of exhibitsfiled or furnished with this report or incorporated herein by reference is found in the Exhibit Index below.
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Exhibit
Number
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Exhibit Description
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31.1*
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||
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31.2*
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32.1**
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101
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Inline XBRL Document Set for the consolidated financial statements and accompanying notes in Part I, "Financial Information" of this
Quarterly Report on Form 10-Q.
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104
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Inline XBRL for the cover page of this Quarterly Report on Form 10-Q, included in the Exhibit 101 Inline XBRL Document Set.
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*Filed herewith.
**The certification furnished in Exhibit 32.1is not deemed "filed" for purposes of Section 18 of the Exchange Act, or otherwise subject to the liability of that
section, nor shall they be deemed incorporated by reference into any filing under the Securities Act or the Exchange Act.
Energy Recovery, Inc. | Q1'2025 Quarterly Report (Form 10-Q)| 34
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned thereunto duly authorized.
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ENERGY RECOVERY, INC.
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Date:
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May 7, 2025
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By:
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/s/ DAVID W. MOON
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David W. Moon
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President and Chief Executive Officer
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(Principal Executive Officer)
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Date:
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May 7, 2025
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By:
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/s/ MICHAEL S. MANCINI
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Michael S. Mancini
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Chief Financial Officer
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(Principal Financial Officer)
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Attachments
Disclaimer
ERI - Energy Recovery Inc. published this content on May 07, 2025, and is solely responsible for the information contained herein. Distributed via Public Technologies (PUBT), unedited and unaltered, on May 07, 2025 at 22:46 UTC.
