NASDAQ$ERII

Energy Recovery Inc · Q1 2020 earnings

Q1 2020 earnings · · Investor relations

Briefing

Energy Recovery reported first quarter results with revenue increase.

Energy Recovery reported a revenue of $21.5 million, a 9% increase year-over-year. Net income was $0.6 million, or $0.01 per diluted share.

  • Total product revenue of $19.0 million, an increase of 18% year-over-year
  • Total revenue of $21.5 million, an increase of 9% year-over-year
  • Product gross margin of 70.1%, an increase of 80 basis points year-over-year
  • Net income of $0.6 million, or diluted earnings per share of $0.01, a decrease of $0.04 year-over-year

Headline financials

Total Revenue

$21.5M

Previous: $19.8M+8.8%
EPS (adj)

$0.01

Previous: $0.05-80.0%
Capital Expenditures

-$1.38M

Previous: -$1.57M+11.9%
Free Cash Flow

-$759K

Previous: $1.09M-169.8%
Net Income

$621K

Previous: $2.65M-76.6%
Operating Income

$128K

Previous: $2.71M-95.3%
Gross Profit

$420K

Previous: $523K-19.7%
Cash & Equivalents

$32.8M

Previous: $17M+93.3%
Total Assets

$191M

Previous: $180M+5.9%
Stock-Based Comp

$1.5M

Previous: $1.68M-10.4%

Revenue & EPS history

Energy Recovery · Revenue · Quarterly

$21.5M

Q1 2020+8.8%vs Q1 2019
Beat estimate in 10 of 16 quarters(63%)
ActualEstimate

Revenue by segment

Energy Recovery · $33.6M total across 3 segments · Q4 2021

  • Megaproject
    $25.1M+28.1%
  • OEM
    $5.7M+39.0%
  • Aftermarket
    $2.8M+3.7%

Forward guidance

The Company believes that its cash on hand, marketable securities and ongoing cash generated from operations should be sufficient to cover the Company’s capital requirements for the next 12 months and believes that it will be able to fulfill most, if not all, of its existing delivery obligations in fiscal year 2020.

Tailwinds

  • Cash on hand, marketable securities and ongoing cash generated from operations should be sufficient to cover the Company’s capital requirements for the next 12 months
  • Available product inventory combined with current rate of production leads the company to believe that it can fulfill most, if not all, of its existing delivery obligations in fiscal year 2020
  • The desalination industry appears to be showing some stability in fiscal year 2020

Headwinds

  • Gross margins will likely continue to be impacted until such time that the company can operate its manufacturing facilities as originally planned.
  • Future COVID-19 restrictions could cause reduced demand for products if they result in a global recessionary economic environment or impact the construction of large desalination projects.

Historical earnings impact

How earnings announcements have historically affected this stock's price.

Avg. return before/after earnings

Based on 20 quarterly earnings reports · overlaid with Q1 2020

Historical avgQ1 2020

-1.2%

Avg return

Earnings day

-1.0%

Avg return

5 days after

+0.1%

Avg return

30 days after

49%

32 / 65 earnings

Positive

+34.9%

Q4 2013

Best reaction

-35.4%

Q4 2025

Worst reaction

Earnings price reactions
QuarterReport dateReaction (Day 0)+5 days+30 days
Q1 2026+2.7%-23.1%-29.3%
Q4 2025-35.4%-36.6%-38.8%
Q3 2025-16.0%-18.6%-14.7%
Q1 2025-18.5%-18.5%-16.0%
Q4 2024+2.5%+3.7%+8.7%
Q3 2024+1.6%+5.3%-11.5%
Q2 2024+21.6%+10.8%+12.2%
Q1 2024-12.5%-9.9%-9.4%
Q4 2023-3.6%-2.4%-2.4%
Q3 2023+16.5%+19.1%+24.2%
Q2 2023-15.0%-9.5%-17.0%
Q1 2023+4.7%+6.0%+13.8%
Q4 2022+3.4%+2.8%+2.7%
Q3 2022-30.1%-28.5%-11.5%
Q2 2022+2.8%+2.3%+3.1%
Q1 2022-2.7%-6.1%+14.0%
Q4 2021+4.5%+1.4%+7.2%
Q3 2021+5.5%+7.8%-0.6%
Q2 2021-2.1%-3.0%+17.6%
Q1 2021-0.8%-15.4%-3.5%
Q4 2020+6.8%+0.2%+3.2%
Q3 2020+9.9%+11.0%+23.4%
Q2 2020-4.3%-3.2%+6.7%
Q1 2020-6.9%-6.1%-8.0%
Q4 2019+6.3%-8.9%-29.8%
Q3 2019+2.1%+0.2%-7.0%
Q2 2019+1.6%-9.7%-11.9%
Q1 2019+10.7%+6.0%-2.1%
Q4 2018+11.6%+3.8%+16.3%
Q3 2018+22.4%+21.9%+8.9%
Q2 2018+13.8%+20.8%+20.2%
Q1 2018+2.6%+9.7%+7.0%
Q4 2017+13.3%+26.3%+19.3%
Q3 2017+12.3%+27.9%+42.4%
Q2 2017-10.7%-12.3%-14.0%
Q1 2017-10.3%-9.2%-11.9%
Q4 2016-7.3%-10.4%-7.0%
Q3 2016-24.8%-16.8%-14.5%
Q2 2016+12.5%+22.1%+15.7%
Q1 2016-6.3%
Q4 2015-5.7%
Q3 2015+15.1%
Q2 2015+1.9%
Q1 2015+0.0%
Q4 2014-14.7%
Q3 2014-7.5%
Q2 2014+0.5%
Q1 2014-8.7%
Q4 2013+34.9%
Q3 2013-19.1%
Q2 2013+4.0%
Q1 2013-3.4%
Q4 2012+2.0%
Q3 2012-1.7%
Q2 2012+0.0%
Q1 2011+1.4%
Q1 2012-3.0%
Q4 2009-7.6%
Q4 2011-7.6%
Q3 2011-11.0%
Q2 2011-10.1%
Q4 2010-10.1%
Q3 2010+0.8%
Q2 2010+0.7%
Q1 2010-14.5%

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