Exhibit 99.1

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Energy Recovery Reports Third Quarter Financial Results

SAN LEANDRO, Calif. - November 4, 2021 - Energy Recovery, Inc. (Nasdaq: ERII) today announced its financial results for the third quarter ended September 30, 2021.

“2021 is playing out as expected, and we are well positioned to end the year in record fashion. Our desalination business continues to demonstrate strength, and we are building our pipeline of new industrial wastewater orders, two sides of our commitment to helping to address the growing global need for freshwater. We believe the solution to the rapidly increasing freshwater gap requires both increasing supply and better stewardship of water we already have,” said Robert Mao, Chairman of the Board, President and Chief Executive Officer of Energy Recovery.

Mr. Mao continued, “Beyond water, our growth initiative in refrigeration is gaining strong momentum. We have had many fruitful conversations with U.S. and international grocery chains, and have recently signed an agreement to install our PX G1300 energy recovery device in a Vallarta Supermarkets grocery store in California, and signed a letter of intent with another chain in Europe. In addition, we are in discussions with multiple refrigeration manufacturers to help design the next generation of CO2 refrigeration systems featuring our PX G1300 technology at its core. We believe our PX G1300 has the potential to maximize the savings offered by this next generation system, thus transforming the multi-billion dollar refrigeration market by making CO2 refrigeration systems more financially attractive versus incumbent CO2 solutions.”

Financial Results
Three Months Ended September 30,Nine Months Ended September 30,
20212020Variance20212020Variance
(In millions, except net income per share, percentages and basis points)
Product revenue$20.8 $27.4 (24%)$70.3 $65.7 7%
License and development revenue (1)
— — —%— 26.9 (100%)
Total revenue$20.8 $27.4 (24%)$70.3 $92.6 (24%)
Product gross profit$14.7 $19.6 (25%)$48.1 $45.6 5%
Product gross margin70.6 %71.5 %(90) bps68.4 %69.5 %(110) bps
Operating expense$13.3 $13.5 (2%)$40.2 $45.0 (11%)
Operating income$1.4 $6.1 (77%)$7.9 $27.5 (71%)
Net income$1.1 $5.4 (80%)$9.0 $22.9 (61%)
Diluted net income per share$0.02 $0.10 $(0.08)$0.15 $0.41 $(0.26)
Operating cash flow$(4.2)$10.6 $(14.9)$7.3 $10.4 $(3.1)
Cash and investments$108.4 $105.9 2%$108.4 $105.9 2%
(1)In June 2020, the Company terminated the VorTeq License Agreement with Schlumberger Technology Corporation. As there were no future performance obligations to be recognized under the VorTeq License Agreement after the effective date, the Company recognized in full the remaining deferred revenue balance of $24.4 million in the second quarter of fiscal year 2020. In addition, no future license and development revenue was recognized under the VorTeq License Agreement after the second quarter of fiscal year 2020.



Product Channel Revenue
Three Months Ended September 30,Nine Months Ended September 30,
20212020Variance20212020Variance
(In millions, except percentages)
Megaproject$13.3$20.7(36%)$50.3$47.27%
Original equipment manufacturer4.84.119%11.911.72%
Aftermarket2.72.62%8.16.819%
Total product revenue$20.8$27.4(24%)$70.3$65.77%

“We remain on track to finish our year with strong revenue results as we have guided since October last year, with the fourth quarter expected to be a historic revenue quarter,” said Joshua Ballard, Chief Financial Officer of Energy Recovery. “While we are not immune to the ongoing global supply chain crisis and inflationary pressures, our team began preparing for this eventuality last year. We are in a strong position as we look to 2022 in our ability to both manufacture and deliver products to our customers. We continued to invest in increased levels of raw materials and finished goods to mitigate, or even avoid, exogenous shocks. Cash and security balances remain high due to our lower spend and strong collections even while executing over $21 million in cumulative share buybacks through the end of October.”

Third Quarter 2021 Business Highlights
Water Segment
1.Product revenue of $20.8 million was in-line with management’s guidance. We continued to experience rebounding sales in the original equipment manufacturer channel and saw growth in the aftermarket channel. The megaproject channel saw an expected decrease but is projected to rebound strongly in the fourth quarter.
2.A sixth purchase order was received in our industrial wastewater business, further strengthening our first full year in this market.
3.Our gross margin increased to 70.6% from our low in the second quarter. We have largely avoided raw material cost increases due to our timely build up of raw material inventory starting in 2020, as well as internal cost optimization efforts.

Emerging Technologies Segment
1.Our outreach efforts in the commercial refrigeration space have generated a positive response from industry leaders. In late October, we entered into an agreement to deploy the PX G1300 in a grocery store in California. We are targeting first commercial deployments of the PX G1300 in the first half of 2022.
2.During the quarter, we joined the North American Sustainable Refrigeration Council (the “NASRC”). The NASRC is an action-oriented non-profit charity, as defined under the U.S. Internal Revenue Code 501(c)(3), working in partnership with the supermarket industry to create a climate-friendly future for refrigeration by eliminating the barriers to natural refrigerant adoption in supermarkets. Natural refrigerants, such as CO2, have near-zero Global Warming Potential (“GWP”), making it the safest climate-friendly alternative to hydrofluorocarbons which have a GWP into the thousands.
3.Operating expenses in this segment decreased quarter-over-quarter, due primarily to reduced research and development expenditures related to the VorTeq.

Bottom Line Summary
On a quarterly basis, we 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.

Cash Flow Highlights
The Company finished the first quarter ended September 30, 2021 with cash and cash equivalents of $65.7 million, and short-term and long-term investments of $42.7 million, which represents a combined total of $108.4 million.



Forward-Looking Statements
Certain matters discussed in this press release and on the conference call are “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, including the Company’s belief that the Company’s PX G1300 has the potential to maximize the savings offered by the next generation CO2 system; that the Company’s technology can transform the multi-billion dollar refrigeration market by making CO2 refrigeration systems more financially attractive versus incumbent CO2 solutions; the Company’s belief that the fourth quarter revenue will be historic and that the Company will meet its revenue guidance; the Company’s belief that the Company will be able to manufacture and deliver products to its customers in 2022; and the Company’s expectation that the Company will deploy its PX G1300 in the first half of 2022. These forward-looking statements are based on information currently available to us and on management’s beliefs, assumptions, estimates, or projections and are not guarantees of future events or results. Potential risks and uncertainties include any other factors that may have been discussed herein regarding the risks and uncertainties of the Company’s business, and the 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, as well as other reports filed by the Company with the SEC from time to time. Because such forward-looking statements involve risks and uncertainties, the Company’s actual results may differ materially from the predictions in these forward-looking statements. All forward-looking statements are made as of today, and the Company assumes no obligation to update such statements.

Conference Call to Discuss Third Quarter 2021 Financial Results
LIVE CONFERENCE CALL:
Thursday, November 4, 2021, 2:00 PM PDT / 5:00 PM EDT
Listen-only, US / Canada Toll-Free: +1 (877) 709-8150
Listen-only, Local / International Toll: +1 (201) 689-8354
Access code: 13722959

CONFERENCE CALL REPLAY:
Expiration: Saturday, December 4, 2021
US / Canada Toll-Free: +1 (877) 660-6853
Local / International Toll: +1 (201) 612-7415
Access code: 13722959

Investors may also access the live call or the replay over the internet at ir.energyrecovery.com. The replay will be available approximately three hours after the live call concludes.

Disclosure Information
Energy Recovery uses the investor relations section on its website as means of complying with its disclosure obligations under Regulation FD. Accordingly, investors should monitor Energy Recovery’s investor relations website in addition to following Energy Recovery’s press releases, SEC filings, and public conference calls and webcasts.

About Energy Recovery
Energy Recovery creates technologies that solve complex challenges for industrial fluid-flow markets worldwide. Building on our pressure exchanger technology platform, we design and manufacture solutions that make industrial processes more efficient and sustainable. What began as a game-changing invention for desalination has grown into a global business accelerating the environmental sustainability of customers’ operations in multiple industries. Headquartered in the San Francisco Bay Area, Energy Recovery has manufacturing, research and development facilities across California and Texas with sales and on-site technical support available globally. For more information, please visit www.energyrecovery.com.

Contact
Investor Relations
ir@energyrecovery.com
+1 (281) 962-8105



ENERGY RECOVERY, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
September 30,
2021		December 31,
2020
(In thousands)
ASSETS
Current assets:
Cash and cash equivalents$65,745 $94,255 
Short-term investments41,900 20,446 
Accounts receivable, net13,066 11,792 
Inventories, net20,557 11,748 
Prepaid expenses and other assets5,541 4,950 
Total current assets146,809 143,191 
Long-term investments765 — 
Deferred tax assets, net12,093 11,030 
Property and equipment, net20,905 20,176 
Operating lease, right of use asset15,021 16,090 
Goodwill and other intangible assets12,830 12,839 
Other assets365 988 
Total assets$208,788 $204,314 
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable$3,663 $1,118 
Accrued expenses and other liabilities9,582 11,816 
Lease liabilities1,518 1,243 
Contract liabilities1,452 1,552 
Total current liabilities16,215 15,729 
Lease liabilities15,284 16,443 
Other liabilities550 518 
Total liabilities32,049 32,690 
Stockholders’ equity:
Common stock63 62 
Additional paid-in capital192,564 179,161 
Accumulated other comprehensive (loss) income(86)53 
Treasury stock(47,642)(30,486)
Retained earnings31,840 22,834 
Total stockholders’ equity176,739 171,624 
Total liabilities and stockholders’ equity$208,788 $204,314 




ENERGY RECOVERY, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
 Three Months Ended September 30,Nine Months Ended September 30,
 2021202020212020
 (In thousands, except per share data)
Product revenue$20,781 $27,408 $70,328 $65,665 
Product cost of revenue6,089 7,816 22,251 20,049 
Product gross profit14,692 19,592 48,077 45,616 
License and development revenue— — — 26,895 
Operating expenses:
General and administrative5,851 6,271 18,632 18,751 
Sales and marketing2,996 2,141 8,236 5,776 
Research and development4,416 5,098 13,342 18,159 
Amortization of intangible assets2 4 9 12 
Impairment of long-lived assets— — — 2,332 
Total operating expenses13,265 13,514 40,219 45,030 
Income from operations1,427 6,078 7,858 27,481 
Other income (expense):
Interest income36 134 179 809 
Other non-operating (expense) income, net1 (29)(21)(59)
Total other income, net37 105 158 750 
Income before income taxes1,464 6,183 8,016 28,231 
(Benefit from) provision for income taxes393 796 (990)5,297 
Net income$1,071 $5,387 $9,006 $22,934 
Net income per share:
Basic$ 0.02 $ 0.10 $ 0.16 $ 0.41 
Diluted$ 0.02 $ 0.10 $ 0.15 $ 0.41 
Number of shares used in per share calculations:
Basic57,026 55,692 57,053 55,573 
Diluted58,709 56,471 58,785 56,443 




ENERGY RECOVERY, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Nine Months Ended September 30,
20212020
(In thousands)
Cash flows from operating activities:
Net income$9,006 $22,934 
Adjustments to reconcile net income to cash provided by (used in) operating activities
Stock-based compensation4,574 3,672 
Depreciation and amortization4,141 3,963 
Amortization of premiums and discounts on investments340 311 
Deferred income taxes(1,063)5,443 
Impairment of long-lived assets— 2,332 
Other non-cash adjustments161 316 
Changes in operating assets and liabilities:
Accounts receivable, net(1,274)1,862 
Contract assets1,892 (747)
Inventories, net(8,874)(506)
Prepaid and other assets(1,097)295 
Accounts payable2,739 656 
Accrued expenses and other liabilities(3,132)(2,579)
Contract liabilities(119)(27,602)
Net cash provided by operating activities7,294 10,350 
Cash flows from investing activities:
Sales of marketable securities— 10,573 
Maturities of marketable securities20,686 50,467 
Purchases of marketable securities(43,339)(12,855)
Capital expenditures(4,899)(6,019)
Other5 — 
Net cash (used in) provided by investing activities(27,547)42,166 
Cash flows from financing activities:
Net proceeds from issuance of common stock8,939 1,260 
Tax payment for employee shares withheld— (23)
Repurchase of common stock(17,156)— 
Net cash (used in) provided by financing activities(8,217)1,237 
Effect of exchange rate differences on cash and cash equivalents(40)11 
Net change in cash, cash equivalents and restricted cash(28,510)53,764 
Cash, cash equivalents and restricted cash, beginning of year94,358 26,488 
Cash, cash equivalents and restricted cash, end of period$65,848 $80,252 




ENERGY RECOVERY, INC.
SUPPLEMENTAL FINANCIAL INFORMATION
(Unaudited)
Three Months Ended September 30, 2021Three Months Ended September 30, 2020 (Recast)
WaterEmerging TechnologiesCorporateTotalWaterEmerging TechnologiesCorporateTotal
(In thousands)
Product revenue$20,767 $14 $— $20,781 $27,408 $— $— $27,408 
Product cost of revenue6,089 — — 6,089 7,816 — — 7,816 
Product gross profit14,678 14 — 14,692 19,592 — — 19,592 
Operating expenses
General and administrative1,435 1,373 3,043 5,851 2,371 1,359 2,541 6,271 
Sales and marketing2,250 327 419 2,996 1,507 327 307 2,141 
Research and development762 3,654 — 4,416 723 4,375 — 5,098 
Amortization of intangible assets2 — — 2 4 — — 4 
Total operating expenses4,449 5,354 3,462 13,265 4,605 6,061 2,848 13,514 
Operating income (loss)$10,229 $(5,340)$(3,462)1,427 $14,987 $(6,061)$(2,848)6,078 
Other income, net37 105 
Income before income taxes$1,464 $6,183 

Nine Months Ended September 30, 2021Nine Months Ended September 30, 2020 (Recast)
WaterEmerging TechnologiesCorporateTotalWaterEmerging TechnologiesCorporateTotal
(In thousands)
Product revenue$70,275 $53 $— $70,328 $65,665 $— $— $65,665 
Product cost of revenue22,251 — — 22,251 20,049 — — 20,049 
Product gross profit48,024 53 — 48,077 45,616 — — 45,616 
License and development revenue— — — — — 26,895 — 26,895 
Operating expenses
General and administrative4,768 3,854 10,010 18,632 6,417 4,001 8,333 18,751 
Sales and marketing6,535 735 966 8,236 4,307 901 568 5,776 
Research and development1,858 11,484 — 13,342 2,585 15,574 — 18,159 
Amortization of intangible assets9 — — 9 12 — — 12 
Impairment of long-lived assets— — — — — 2,332 — 2,332 
Total operating expenses13,170 16,073 10,976 40,219 13,321 22,808 8,901 45,030 
Operating income (loss)$34,854 $(16,020)$(10,976)7,858 $32,295 $4,087 $(8,901)27,481 
Other income, net158 750 
Income before income taxes$8,016 $28,231