Energy Recovery, Inc. · NASDAQ:ERII
Energy Recovery — Investor Presentation (March 2016)
24 slides from Energy Recovery's investor presentation, Mar 23, 2016
Slide 1: ERI Investor Presentation
ERI INVESTOR PRESENTATION (NASDAQ: ERII) March 2016 energy recovery”
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 presentation include statements about market trends, possible future revenue growth, and bus
Slide 3: Energy Recovery Snapshot
ENERGY RECOVERY SNAPSHOT Who We Are o Anenergy solution provider o Atechnology leader in applying fluid dynamics and advanced materials science What We Do o Create markets to preserve or eliminate pumps that are subject to and destroyed by hostile process fluids o Convert wasted pressure energy into
Slide 4: Transformational Year in the Evolution of Our Company
TRANSFORMATIONAL YEAR IN THE EVOLUTION OF OUR COMPANY Reloaded Growth Strategy Value Creation New Leadership Team Started production portfolio 1H’2015 ® energy recovery Executed 15-year Deal with Schlumberger (October 2015) Ended Year with $100MM of cash, no debt Successful Completion of Field Trial
Slide 5: Investment Highlights
INVESTMENT HIGHLIGHTS Validation of New Corporate Strategy & Reconstituted Management Team © © Corporate speed and agility © Signed 15 year exclusive licensing agreement with Schlumberger ® Financial Strength © Industry leading balance sheet (~$100MM in cash, no debt) a. © Momentum to achieve break-
Slide 6: Product Portfolio
PRODUCT PORTFOLIO ROI Turbine Up-to 70% Efficiency IsoGen Applications Pressure Exchanger Up-to 98% Efficiency = Gas Processing b= = Pipelines a I Fracing: VorTeq —_Desall: PX Turbo Charger IsoBoost Applications = Gas Processing = Ammonii ® energy recovery ‘STRICTLY PRIVATE AND CONFIDENTIAL Page 6
Slide 7: $4 Billion Global Recurring Markets
$4 BILLION GLOBAL RECURRING MARKETS Pose | Desal Hydraulic Fracturing Ammonia $50M $1.4B $838M Gas Processing $369M Pipelines $936M Sf ‘STRICTLY PRIVATE AND CONFIDENTIAL PAGE 7
Slide 8: Emerging Markets: Hydraulic Fracturing
Slide 9: Signed 15-Year License Agreement with Schlumberger
SIGNED 15-YEAR LICENSE AGREEMENT WITH SCHLUMBERGER o Agreement provides exclusive rights to ERI’s Vorteq™ Hydraulic Pumping System = Commercializes the VorTeq™ technology with one of the industry’s most respected oil-field services companies o Highlights = 2015: Schlumberger paid an upfront $75M exc
Slide 10: VorTeq Integration
VORTEQ INTEGRATION ® energy recovery ‘STRICTLY PRIVATE AND CONFIDENTIAL Page 10
Slide 11: Value Proposition — Orders of Value Creation
VALUE PROPOSITION — 3 ORDERS OF VALUE CREATION Decreased Pump "Redundancy / Lower CAPEX: $1- 2M p/yr p/fleet Pumping Paradigm Shift: $8- $12M p/yr p/fleet or $4.00 to $5.00 p/BOE ® energy recovery ‘STRICTLY PRIVATE AND CONFIDENTIAL Page 11
Slide 12: Order Value Prop — Paradigm Shift
30 ORDER VALUE PROP — PARADIGM SHIFT $8-12M Savings/Fleet $4-5 Savings/Barrel Migrate to a More Efficient and Cost Effective Pumping Model Dramatically Decrease Operational Footprint Streamline Process ing Pumping Model with 15-20 PD Pum, ® energy recovery ‘STRICTLY PRIVATE ANDCONFIDENTIAL New Pumpi
Slide 13: Speed & Agility — Path to Commercialization
SPEED & AGILITY — PATH TO COMMERCIALIZATION Milestone | © Successfully complete 5 frac stages performed at Schlumberger test facility and satisfy certain KPI’s Liberty Oilfield Services Agreement Milestone II July'14 Oct'45 2016 © KPI: Successfully complete 20 frac ' stages performed at actual well
Slide 14: PAGE
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Slide 15: Desalination — Our First Disruptive Technology
DESALINATION — OUR FIRST DISRUPTIVE TECHNOLOGY o The “PX Pressure Exchanger” = 16,000 PX Devices Installed Worldwide = 3-Month Payback = 25-year Life with No Maintenance by = Dominant Global Market Share = 60%+ Gross Margins o Compelling Short and Long Term Market Opportunity = Global Water Demand /
Slide 16: Desalination with PX Pressure Exchanger
DESALINATION WITH PX PRESSURE EXCHANGER MEMBRANES HIGH PRESSURE PUMP ® energy recovery ‘STRICTLY PRIVATE AND CONFIDENTIAL Page 16
Slide 17: Emerging Markets
Emerging Markets ‘STRICTLY PRIVATE AND CONFIDENTIAL PAGE 17
Slide 18: Pain Points
PAIN POINTS Excessive Redundancy & High Energy Downtime is Costly Maintenance Consumption Common Denominator: Pumps ®, energy recovery STRICTLY PRIVATE AND CONFIDENTIAL Page 18
Slide 19: Our Solution — Gas Processing
OUR SOLUTION — GAS PROCESSING ® energy recovery ‘STRICTLY PRIVATE AND CONFIDENTIAL Page 19
Slide 20: Our Solution - Ammonia
OUR SOLUTION - AMMONIA Lean souvent Boe Solvent Cee isi co, pRooucT a LEAN SOLVENT —) ® energy recovery ‘STRICTLY PRIVATE AND CONFIDENTIAL Page 20
Slide 21: Our Solution - Pipelines
OUR SOLUTION - PIPELINES | eh - oh ‘Pumping station aa Vertical Pipelines Must be Depressurized Pressure Generating Power ® energy recovery ‘STRICTLY PRIVATE AND CONFIDENTIAL Page 21
Slide 22: Strategic Imperatives
Strategic Imperatives Short Term and Long Term Goals “7 Sf energy recovery ‘STRICTLY PRIVATE AND CONFIDENTIAL PAGE 22
Slide 23: Perpetual Innovation — Product Development
PERPETUAL INNOVATION — PRODUCT DEVELOPMENT o Develop “PX as a Pump” applications that increase ERI’s total addressable market and support the following criteria: = High rates of fluid flow = High pressure differentials = High degrees of capital intensity in the form of pumping assets o Innovation is
Slide 24: Shareholder Value Creation: Strategic Imperatives
SHAREHOLDER VALUE CREATION: STRATEGIC IMPERATIVES Commercialize VorTeq - on schedule to achieve milestone | and Il in 2016, begin deployment in 2017 Innovate and achieve proof of concept of new products that are derivatives of Pressure Exchanger Technology every 24 months, in annual cycles Enhance m