Energy Recovery, Inc. Reports Third Quarter 2009 Financial Results
SAN LEANDRO, Calif.--(BUSINESS WIRE)-- Energy Recovery, Inc. (Nasdaq:ERII), a leader in the design and development of energy recovery devices for desalination, announced today the results of its third quarter ended September 30, 2009. In the third quarter, ERI achieved net revenue of $9.5 million and a net profit of $550,000 or $0.01 per diluted share. Both the net revenue and net profit were in line with the Company's guidance.
"Our third quarter results were in line with our expectations and we are preparing for a busy fourth quarter," said GG Pique, President and CEO of Energy Recovery, Inc. "In addition, we are starting to book orders for delivery in 2010 and, with the credit markets beginning to stabilize, we believe the stage is being set for improvement in top line growth in 2010 and even more growth in 2011 as pent-up demand is satisfied."
ERI provides the following guidance for the fourth quarter of 2009 and the full year:
Q4 2009 Fiscal Year 2009
Estimated net revenue $14.5 to $16.5 million $46 to $48 million
Estimated net income $1.4 to $2.1 million $3.5 to $4.0 million
Estimated earnings per diluted $0.03 to $0.04 $0.07 to $0.08
share
ERI estimates that for 2010, its net revenue will improve by 25% over 2009.
Forward Looking Statements
This press release includes "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Such forward-looking statements include statements about ERI's estimated net revenue, net income and earnings per diluted share for the fourth quarter of 2009 and for the 2009 and 2010 fiscal years. Because such forward-looking statements involve risks and uncertainties, the Company's actual results may differ materially from the predictions in those forward-looking statements. Factors that could cause actual results to differ materially include, but are not limited to, delays in, or cancellation of, the construction of desalination plants, the inability of our customers to obtain project financing, delays in governmental approvals, changes in end users' budgets for desalination plants or the timing of their purchasing decisions, the world economic crisis and other risks detailed in the Company's filings with the Securities and Exchange Commission ("SEC"). All forward-looking statements are made as of today, and the Company assumes no obligation to update such statements. For more details relating to the risks and uncertainties that could cause actual results to differ materially from those anticipated in our forward-looking statements, please refer to the Company's SEC filings.
Conference Call to Discuss Third Quarter 2009 Results
The conference call scheduled today at 1:30 p.m. PDT will be in a "listen-only" mode for all participants other than the investment professionals who regularly follow the Company. The toll-free phone number for the call is 888-549-7750 or 480-629-9866 and the access code is 4171252. Callers should dial in approximately 15 minutes prior to the scheduled start time. A telephonic replay will be available at 800-406-7325 or 303-590-3030, Access Code: 4171252, until Thursday, November 19, 2009. Investors may also access the live call or the replay over the internet at www.energyrecovery.com. The replay will be available approximately three hours after the live call concludes.
About ERI(R)
Energy Recovery, Inc. (NASDAQ:ERII) designs and develops energy recovery devices that help make desalination affordable by significantly reducing energy consumption. ERI's PX Pressure Exchanger(TM) (PX(TM)) device is a rotary positive displacement pump that recovers energy from the high pressure reject stream of seawater reverse osmosis systems at up to 98% efficiency. The company is headquartered in the San Francisco Bay Area with offices in key desalination centers worldwide, including Madrid, Shanghai, Florida and the United Arab Emirates. For more information on ERI and PX technology, please visit www.energyrecovery.com.
Unaudited Financial Results
ENERGY RECOVERY, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except share data)
(unaudited)
September 30, December 31,
2009 2008
ASSETS
Current assets:
Cash and cash equivalents $ 74,725 $ 79,287
Restricted cash 2,938 246
Accounts receivable, net of allowance for doubtful
accounts of $28 and $59 at September 30, 2009 and 10,319 20,615
December 31, 2008, respectively
Unbilled receivables, current 6,315 4,948
Inventories 10,510 8,493
Deferred tax assets, net 1,950 1,755
Prepaid income taxes 749 -
Prepaid expenses and other current assets 1,515 984
Total current assets 109,021 116,328
Unbilled receivables, non-current 229 1,929
Restricted cash, non-current 2,588 19
Property and equipment, net 7,031 1,845
Intangible assets, net 309 321
Deferred tax assets, non-current, net 106 119
Other assets, non-current 52 51
Total assets $ 119,336 $ 120,612
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 803 $ 2,270
Accrued expenses and other current liabilities 4,778 4,787
Income taxes payable 38 1,657
Accrued warranty reserve 312 270
Deferred revenue 1,549 4,000
Current portion of long-term debt 128 172
Current portion of capital lease obligations 36 37
Total current liabilities 7,644 13,193
Long-term debt 245 385
Capital lease obligations, non-current - 27
Other non-current liabilities 4 8
Total liabilities 7,893 13,613
Commitments and Contingencies (Note 6)
Stockholders' equity:
Preferred stock, $0.001 par value; 10,000,000 - -
shares authorized; no shares issued or outstanding
Common stock, $0.001 par value; 200,000,000 shares
authorized; 50,164,317 and 50,015,718 shares issued 50 50
and outstanding at September 30, 2009 and December
31, 2008, respectively
Additional paid-in capital 100,749 98,527
Notes receivable from stockholders (88 ) (296 )
Accumulated other comprehensive loss (63 ) (44 )
Retained earnings 10,795 8,762
Total stockholders' equity 111,443 106,999
Total liabilities and stockholders' equity $ 119,336 $ 120,612
ENERGY RECOVERY, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
(unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
2009 2008 2009 2008
Net revenue $ 9,545 $ 9,044 $ 31,280 $ 30,125
Cost of revenue 3,387 3,497 11,251 11,122
Gross profit 6,158 5,547 20,029 19,003
Operating expenses:
General and administrative 3,043 2,696 9,705 8,211
Sales and marketing 1,634 1,467 4,795 4,263
Research and development 779 678 2,409 1,723
Total operating expenses 5,456 4,841 16,909 14,197
Income from operations 702 706 3,120 4,806
Other income (expense):
Interest expense (10 ) (17 ) (34 ) (62 )
Interest and other income 30 217 59 841
(expense), net
Income before provision for 722 906 3,145 5,585
income taxes
Provision for income taxes 172 283 1,112 2,186
Net income $ 550 $ 623 $ 2,033 $ 3,399
Earnings per share:
Basic $ 0.01 $ 0.01 $ 0.04 $ 0.08
Diluted $ 0.01 $ 0.01 $ 0.04 $ 0.07
Number of shares used in per
share calculations:
Basic 50,160 49,646 50,120 43,114
Diluted 52,584 52,396 52,614 45,647
Source: Energy Recovery, Inc.
Released November 5, 2009