Energy Recovery, Inc. · NASDAQ:ERII
Energy Recovery — Investor Presentation (November 2015)
27 slides from Energy Recovery's investor presentation, Nov 13, 2015
Slide 1: Investor Presentation November 2015
INVESTOR PRESENTATION NOVEMBER 2015 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: Corporate Overview
CORPORATE OVERVIEW o NASDAQ: ERII o Market Cap ~$450M o IPO in 2008 o Headquartered in San Leandro, CA o 105+ employees o Global presence o Strong Balance Sheet ($100M Cash, No debt) | S@ energy recovery”
Slide 4: About Us
ABOUT US o Who We Are = Energy solutions provider o Core Competencies = Fluid dynamics = Advanced material science o What We Do = Convert wasted pressure energy into reusable asset = Preserve or eliminate pumping technology in hostile processing environments 4 energyrecovery.com ecopyigt 2018
Slide 5: Product Portfolio
PRODUCT PORTFOLIO ROI Turbine Up-to70% Efficiency IsoGen Applications = Gas Processing = Pipelines Pressure ae) Up-t098% ee) Fracing: Vorfeq™ — Desal: PX Turbo Charger Up-to 75% Efficiency IsoBoost Applications * Gas Processing = Ammonia 5 energyrecovery.com ecopyigt 2015
Slide 6: $4 Billion Global Recurring Markets
$4 BILLION GLOBAL RECURRING MARKETS Desal | Gas Processing | Ammonia $50M $369M $838M Pipelines Urea $936M $364M Hydraulic Fracturing $1.4B
Slide 7: Key Milestones & Performance
KEY MILESTONES & PERFORMANCE o Recent Key Developments CEO Transition (Joel Gay appointed CEO in April 2015) Management reconstituted (CFO and VP of Strategy joined in June 2015) Strategy Reloaded — Bias towards execution (March 2015) Liberty Field Trial Commencement of VorTeq™ for Hydraulic Fractur
Slide 8: 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 9: Slide 9
Slide 10: Pain Point
PAIN POINT Pump Failures are the #1 Operational Challenge Faced by the Industry _..»y High Pump Maintenance Costs Sporadic and Excessive Downtime (Pump Failures) aig High Levels of Redundancy (Mitigate Pump Failures) The Mechanical Equivalent of Adding Sand to Your Car’s Engine | S@ energy recovery”
Slide 11: Our Solution
OUR SOLUTION Possibly the Most Disruptive Product Ever Developed by ERI Vorleq PURE GRIT 11 energyrecovery.com | CS enesey recovery”
Slide 12: VorTeq Integration
VORTEQ INTEGRATION
Slide 13: Value Proposition — Orders of Value Creation
VALUE PROPOSITION — 3 ORDERS OF VALUE CREATION Reduced .- Maintenance: “" $1-2M p/yr p/fleet , Decreased Pump ~" Redundancy / Lower CAPEX: $1 -2M p/yr p/fleet Pumping ra * Paradigm Shift: $8 - $12M p/yr p/fleet OR $4.00 to $5.00 p/BOE | a
Slide 14: 1st Order Value Prop - Reduced Maintenance Cost
15’ ORDER VALUE PROP - REDUCED MAINTENANCE COST Status-Quo VorTeq Optimized » ) VorTeq Royalty $1.5M mp Maintenance $1.5M Fleet Impact Per Year (Based on 2,000 pumping hours plyr) S@ energy recovery”
Slide 15: 2nd Order Value Prop - Reduced Redundancy
2ND ORDER VALUE PROP - REDUCED REDUNDANCY _» Decreased Pump Redundancy / Lower CAPEX Avg # of Redundant Pumps pifleet: 4 Eliminate Future CAPEX and Maintenance: Eliminate Opportunity Cost of Idle Avg. Cost Capacity: p/Pump:$1.5M. $10 - 14M p/Yr Revenue Generation Pumpers will be able to decrease red
Slide 16: 3rd Order Value Prop - Paradigm Shift
3RO ORDER VALUE PROP - PARADIGM SHIFT Pumping Model with 15-20 PD Pum, Migrate toa More @ Efficient and Cost. Effective Pumping Model Dramatically Decrease Operational Footprint Streamline Process $8-12M Savings/Fleet $4-5 Savings/Barrel Novel Pumping Model with 3-4 PD Pumy SG ereretrecorenrcond | C
Slide 17: Speed & Agility - Concept to Commercialization
SPEED & AGILITY - CONCEPT TO COMMERCIALIZATION Feb14 Dec ‘14 oct 45 2016 : Aug ‘13 July 14 Q115 Q415 H : 2017+ Original Liberty Oilfield Services Agreement Gen-2 Developed & Field Trails end VorTeq Concept Invented 47 enargyrecovery.com 2 | CS enesey recovery"
Slide 18: Strategic Significance
STRATEGIC SIGNIFICANCE o Innovation = ERI develops disruptive technologies for value-rich industries; first in desalination, now in hydraulic fracturing o Validation = Recent deal with Schlumberger Technology, the global leader in oilfield technology, verifies Company’s ability to create markets in
Slide 19: Desalination
Slide 20: 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 = Dominant Global Market Share = 60%+ Gross Margins © Compelling Short and Long Term Market Opportunity = Global Water Demand / S
Slide 21: Desalination with PX Pressure Exchanger
DESALINATION WITH PX PRESSURE EXCHANGER MEMBRANES:
Slide 22: Emerging Markets
Emerging Markets
Slide 23: Pain Points
PAIN POINTS Excessive Redundancy & High Energy Downtime is Costly Maintenance Consumption Common Denominator: Pumps S@ energy recovery”
Slide 24: Our Solution — Gas Processing
OUR SOLUTION — GAS PROCESSING a HH = ee 4a oss wm v i. IsoBoost™ ( eet System |
Slide 25: Our Solution — Ammonia
OUR SOLUTION — AMMONIA ssewaen merit © Ff sccomercon | asonnce H | male + AF ceneston am fj me REQUIRED y 4 - rs ts fe A N t IsoBoost™ Ye ‘System © H ¢ eer vent set
Slide 26: The Solution - Pipelines
THE SOLUTION - PIPELINES Vertical Pipelines Must be Depressurized Pressure Generating Power 26 energyrecovery.com | S@ energy recovery”
Slide 27: $4 Billion Global Recurring Markets
$4 BILLION GLOBAL RECURRING MARKETS Desal | Gas Processing | Ammonia $50M $369M $838M Pipelines Urea $936M $364M Hydraulic Fracturing $1.4B
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