NASDAQ$ERII

Energy Recovery Inc · Q3 2021 earnings

Q3 2021 earnings · · Investor relations

Briefing

Reported financial results for the third quarter ended September 30, 2021.

Energy Recovery reported a net income of $1.1 million, or $0.02 per diluted share, for the third quarter ended September 30, 2021, compared to a net income of $5.4 million, or $0.10 per diluted share, for the third quarter ended September 30, 2020. Product revenue was $20.8 million, in line with management's guidance.

  • Product revenue of $20.8 million was in-line with management’s guidance.
  • A sixth purchase order was received in our industrial wastewater business, further strengthening our first full year in this market.
  • Gross margin increased to 70.6% from our low in the second quarter.
  • Outreach efforts in the commercial refrigeration space have generated a positive response from industry leaders and an agreement to deploy the PX G1300 in a grocery store in California.

Headline financials

Total Revenue

$20.8M

Previous: $27.4M-24.2%
EPS (adj)

$0.02

Previous: $0.10-80.0%
Capital Expenditures

-$4.9M

Previous: -$6.02M+18.6%
Free Cash Flow

-$3.83M

Previous: -$632K-505.7%
Net Income

$1.07M

Previous: $5.39M-80.1%
Operating Income

$1.43M

Previous: $6.08M-76.5%
Gross Profit

$36K

Previous: $134K-73.1%
Cash & Equivalents

$65.7M

Previous: $80.1M-17.9%
Total Assets

$209M

Previous: $195M+7.3%
Stock-Based Comp

$1.23M

Previous: $1.08M+14.5%

Revenue & EPS history

Energy Recovery · Revenue · Quarterly

$20.8M

Q3 2021-24.2%vs Q3 2020
Beat estimate in 11 of 16 quarters(69%)
ActualEstimate

Revenue by segment

Energy Recovery · $20.8M total across 3 segments · Q3 2021

  • Megaproject
    $13.3M
  • OEM
    $4.8M
  • Aftermarket
    $2.7M

Forward guidance

The Company expects the fourth quarter to be a historic revenue quarter and that the Company will meet its revenue guidance. The Company also expects to be able to manufacture and deliver products to its customers in 2022 and deploy its PX G1300 in the first half of 2022.

Tailwinds

  • Company’s PX G1300 has the potential to maximize the savings offered by the next generation CO2 system
  • Company’s technology can transform the multi-billion dollar refrigeration market by making CO2 refrigeration systems more financially attractive versus incumbent CO2 solutions
  • Company will meet its revenue guidance
  • Company will be able to manufacture and deliver products to its customers in 2022
  • Company will deploy its PX G1300 in the first half of 2022

Headwinds

  • Ongoing global supply chain crisis
  • Inflationary pressures
  • Risk Factors in the Company’s Form 10-K filed with the U.S. Securities and Exchange Commission (“SEC”) for the year ended December 31, 2020
  • Risks discussed under “Risk Factors” in the Company’s Form 10-K filed with the U.S. Securities and Exchange Commission (“SEC”) for the year ended December 31, 2020
  • Other reports filed by the Company with the SEC from time to time

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 Q3 2021

Historical avgQ3 2021

-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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