Energy Recovery, Inc. · NASDAQ:ERII
Energy Recovery — Shareholder Meeting (June 2019)
21 slides from Energy Recovery's shareholder meeting presentation, Jun 13, 2019
Slide 1: Energy Recovery Annual Shareholder's Meeting Presentation June 2019
BG energy recovery’ Energy Recovery Annual Shareholder’s Meeting)Presentation June 2019
Slide 2: Forward Looking Statement
FORWARD LOOKING STATEMENT This presentation 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, antic
Slide 3: Energy Recovery Snapshot
ENERGY RECOVERY SNAPSHOT Who Are We An engineering-driven technology company delivering innovative solutions for industrial fluid flow processes Our technologies drive meaningful cost savings and operational efficiencies for customers ° ° Our Approach o Convert wasted pressure energy into a reusable
Slide 4: Our Solutions
OUR SOLUTIONS cs Energy Recovery Devices Hydraulic Fracturing Solution PX® Pressure Exchanger® AT™ Turbocharger VorTeq™ Pumps Mud Pumping Solution AquaBold™ High Vertical Circulation Horizontal MTeq™ Pressure Pump ump Circulation Pump © energy recovery’ (4)
Slide 5: Our Global Reach of Energy Recovery Solutions
OUR GLOBAL REACH OF ENERGY RECOVERY SOLUTIONS ~17M cubic meters/day of potable >11.5M metric tons CO? offset/year ~$2.0B/year saved for mers? water produced? Customers equal to >2.4M cars? Sf energy recovery" ~20,000 devices installed worldwide estimates
Slide 6: Historical Financial Results
HISTORICAL FINANCIAL RESULTS Revenue: 25% CAGR 2014-2018 Product Gross Margin Strength $75M 70.7% 64.1% 67.1% 54.9% 56.2% 1014 2016 2017 2018 Net Cash and Securities Position of over $91M o Weare positioned to make critical investments in our business = Organic or inorganic opportunities to expand o
Slide 7: Reinvigorating Energy Recovery
S energy recovery’ Reinvigorating Energy Recovery Transforming our organization
Slide 8: Realignment + Refocus = A Reinvigorated Energy Recovery
REALIGNMENT + REFOCUS = A REINVIGORATED ENERGY RECOVERY Realigned organization to ensure proper focus on execution and resource allocation © Separated into Water and Oil & Gas business units o Assembled separate Water and Oil & Gas teams to reinvigorate each business vertical o Reorganized R&D to be
Slide 9: Strategically Investing in Engineering-Driven Organization
STRATEGICALLY TO AN DRIVEN O1 IN Investing in multi-disciplinary engineering talent R&D Spend as % of OPEX o Realigning R&D organization to improve focus 365% ° and ability to execute 32.9% © Building necessary infrastructure si) ° i ilities critical for — of disruptive technologies © Over 5x increa
Slide 10: Evolving Manufacturing Capabilities
EVOLVING MANUFACTURING CAPABILITIES Advanced Ceramics Manufacturing Capabilities Help Drive Water Success © Vertically integrated ceramics manufacturing facility located in-house in CA = Creates potential competitive barrier to entry © Best practices ensure high-quality production process = Approxim
Slide 11: Water
Slide 12: Fresh Water Scarcity Is Increasing
FRESH WATER SCARCITY IS INCREASING Fresh water demand is increasing, creating global demand gaps o Water demand driven by population growth, industrialization, rapid ur ization, climate change o The world will only have 60% of the water it needs by 20301 © Potable water demand expected to increase b
Slide 13: Thermal Desalination Decommissioning Creating Incremental Demand
THERMAL DESALINATION DECOMMISSIONING CREATING INCREMENTAL DEMAND o Thermal seawater ination was the i through the 1990s. © Operational savings from devices like the PX made SWRO significantly cheaper than thermal = Thermal OPEX costs today are roughly 2x higher than SWRO = $1B SWRO retrofit of two S
Slide 14: Focused on Expanding Our Water Business
FOCUSED ON EXPANDING OUR WATER BUSINESS We Currently Focus on Only 1-2% of a Project’s Average Desalination Project Capital Spend? Capital Spend o Energy recovery devices make up a small fraction of CAPEX, but are critical to make plant Intake/Outfalls 4 “i retreatment operations affordable 6% Engin
Slide 15: Global Water Macro Trends Driving Robust Future Outlook
GLOBAL WATER MACRO TRENDS DRIVING ROBUST FUTURE OUTLOOK Factors driving forecasted growth © Macro demand trends = Population growth, industrialization, rapid urbanization, climate change o Macro supply trends = SWRO water supply expansion = Thermal to SWRO water retrofits to maintain supply o Water
Slide 16: Oil & Gas
Slide 17: We Are Applying Our Water Expertise to Oil & Gas
WE ARE APPLYING OUR WATER EXPERTISE TO OIL & GAS Water and Oil & Gas have simil © High pressure fluid environments © Potential e of hydraulic energy from a high-p1 fluid to a low-p! fluid © Opportunities to eliminate waste in system — increase efficiencies and decrease costs Leveraging Water experie
Slide 18: VorTeq Commercialization Remains Our Focus
VORTEQ COMMERCIALIZATION REMAINS OUR FOCUS Materially advancing VorTeq technology © Confident in core pressure exchanger technology o Substantial progress in advancing and implementing system level design enhancements = Required prior to Milestone 1 = Critical for technology commercialization © Tech
Slide 19: Our Commercial Development Center Is Critical to Growth
OUR COMMERCIAL DEVELOPMENT CENTER IS CRITICAL TO GROWTH Rigorous VorTeq system testing and validation ongoing © Facility uses industry standard equipment to simulate the pressures, flow, and operating conditions of a real frac site © Allows us to confirm system reliability and repeatability in varia
Slide 20: We Are Proactively Preparing for Post Commercialization Execution
WE ARE PROACTIVELY PREPARING FOR POST COMMERCIALIZATION EXECUTION Manufacturing © Construction has begun on manufacturing facility o Building infrastructure to support testing and commercial production levels = Procuring advanced equipment to precision machine, inspect and test tungsten carbide comp
Slide 21: BO energy recovery’
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