Energy Recovery, Inc. · NASDAQ:ERII
Energy Recovery — Investor Presentation (April 2012)
28 slides from Energy Recovery's investor presentation, Apr 9, 2012
Slide 1: Expanding Energy Efficient Technologies to New Horizons
| (erly ENERGY RECOVERY INC Energy Recovery Inc Expanding Energy Efficient Technologies to New Horizons April 9, 2012
Slide 2: Safe Harbor
On Safe Harbor 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 comments about water cost trends, projections pertaining to the global market for
Slide 3: Energy Recovery Inc
Energy Recovery Inc ° Established in 1992; Headquarters in California * NASDAQ: ERII * Market Cap ~ $117M (as of April 2, 2012) * Revenue: $28M * Employees: 98 Background * Global Presence: Offices in Dubai, Madrid, Shanghai * Saving ~10 billion kWh energy per year, which is equivalent to $1 billion
Slide 4: Key Financial Metrics
SSS Key Financial Metrics Key Statistics as of FY 2011 (00 $60,000 >—| Total Cash & Equivalents $ 52,330 + $030 shares Outstanding 52,645 Market Capitalization) $117,398 i0i%o al Debt $185 $014 S500 (1) Morket Cop os of April02, 2012 $47,014 1 $45,853 7 $001 $40,000 - 3 a $0.02 $35,414 s 3 a 8 $10.1
Slide 5: Customer logos
Inma BeFESA *Squalia Grupo OHL Ge Hythux = CL ° © & G & | Agua ig an JOE WaTeR ' Technologies [ENGINEERING] GE Water & Process =
Slide 6: Water Remains a Global Crisis
Water Remains a Global Crisis 97.5% 2.5%: leno ne nl (08 SEawaTER FRESHWATER: ae ICE & SNOW Baars Rear: Less than 1% is Fresh WM Recycle Not Enough! © Reuse # + Per capita consumption is increasing Guizhou Province, Severedrought + Population is growing + Rivers and lakes are being Lake Mead drained
Slide 7: Desalination — Affordable Solution
On Desalination — Affordable Solution $3.00 @ Steam §2.50__________________ ™@ Elec. Power m@ Maintenance m Capex charges $im3 1972 1982 1992 Thermal SWRO SWRO 2010 SWRO %* Average water cost for Barcelona, Los Angeles, Perth, San Diego, and Sydney Source: 2010 GWI Water Tariff Survey
Slide 8: Energy Recovery Device (ERD) Industry Forecast
SSS Energy Recovery Device (ERD) Industry Forecast (in thousands) $200,000 ¢ , / 2 i a ’ 150, £5 $150,000 < & 2 2 2 5 $100,000 ro g 3 zg ‘ao & 2 $50,000 s a 2 (2) $0 2008 2005-2006. «2007. 2008.«S 2009-2010 2011. «2012-2013» 2018-2015 2016 — GWI ERD Market — Actual == GWI ERD Market — Forecast Sourc
Slide 9: ERD Market vs. ERI Revenues (Shifted by Year)
SSS ERD Market vs. ERI Revenues (Shifted by 1 Year) (in thousands) Global capital expenditure on ERDs Spending on water is: $200,000 . > Extremely conservative - > Affected by politics ie > Tied to capital markets Pas z sunone > Very unpredictable ze Collapse of pe {1-Year Time Shift} Credit Markets
Slide 10: Long-Range Global Trend vs. ERI Market Trend
SSS Long-Range Global Trend vs. ERI Market Trend (in thousands) $200,000 2 [a O° $150,000 < co 2 2 2 5 $100,000 2 & 6 zg ‘ao s 2 $50,000 © a2 2 (2) $0 2008 2005 2008-2007 2008« «200920102011 «201220132018 «201520162017 — GWI ERD Market — Actual == GWI ERD Market — Forecast —— ERI Revenue «+ ERI Reve
Slide 11: Long-Range Global Trends
Long-Range Global Trends (in thousands) $200,000 GROWTH COMPRESSION GROWTH! | + Moderate *Higher _ + Industry growth of 25%+ 3 competition eompesnon + Market share gains fe _+ LowerASPs___ £5 $150,000 - . Increased profitability s + LowerGM (higher ASPs, reduced” 2 + Smaller costs) we 2 projects + I
Slide 12: Rapidly Growing Market
Rapidly Growing Market Headquarters San Leandro, California Madrid, Spain Dubai, UAE Shanghai, China e © Sales Offices © Device Installations e e e 12
Slide 13: The Technology
The Technology
Slide 14: Desalination With Energy Recovery
Desalination With Energy Recovery ERI-PX Technology Low-pressure Membrane fresh water exits the plant (40%) High-pressure seawater High-pressure reject stream flow (60%) High-pressure Hightpressure seawater flow (60%) pump flow (40%) Low-pressure seawater enters the plant Low-pressure _ reject strea
Slide 15: Unique Technology and Elegant Design
Unique Technology and Elegant Design e Only one moving part e Engineered ceramics — Tremendous durability — No corrosion © 98% efficiency e 25-year design life e No scheduled maintenance e Low life-cycle costs e Minimal footprint e Protected by US and foreign patents 15
Slide 16: Competitive Matrix
Competitive Matrix : wn (3 (%6) oMegos; §=—(% 08) feBnyjUED Aouaioyjy YyBIH ‘sA xedeg MoT 16
Slide 17: Moving Beyond Water
| (erly ENERGY RECOVERY INC Moving Beyond Water
Slide 18: Core Competencies
Core Competencies Material Science Energy Recovery Advanced Ceramics Fluid Dynamics
Slide 19: Materials Science Expertise
19 Materials Science Expertise New Addressable PROCESSED POWDER FIRING) IBROCESS:
Slide 20: Targeting an Addressable Market Times the Size of Desalination
Targeting an Addressable Market 12 Times the Size of Desalination Ceramics Chemical /Food Processing > — Desalination $200 Million Addressable Market 20
Slide 21: Evolving Rapidly to Many Products, Many Markets
Evolving Rapidly to Many Products, Many Markets One product, One market a
Slide 22: Thank You!
(ex y ENERGY RECOVERY INC THANK YOU!
Slide 23: Appendix
| (erly ENERGY RECOVERY INC Appendix
Slide 24: Barcelona (Spain) 200,000 m3/day (53 MGD)
Barcelona (Spain) 200,000 m?/ day (53 MGD)
Slide 25: Al Shoaibah (Saudi Arabia) 150,000 m3/day (40 MGD)
Al Shoaibah (Saudi Arabia) 150,000 m?/day (40 MGD)
Slide 26: ERI PX is Superior to Competitor's Products
ERI PX is Superior to Competitor’s Products DWEER * Complicated double chamber * 7 moving parts * Metallic ° 4x larger footprint ° Primary competition Pelton Wheels / Hydraulic Turbochargers * Maximum 80% efficiency 26
Slide 27: Rapid Growth & Execution
Pa Rapid Growth & Execution > Mega Plants > Achieving 60% global market share Hadera, Israel Torrevieja, Spain Barcelona, Spain Hamma, Algeria Beni Saf, Algeria Tlemcen Souk Tleta, Algeria Mostaganem, Algeria Tlemcen Hounaine, Algeria Shuaibah lll, Saudi Arabia Adelaide, Australia Shuwaikh, Kuwait P
Slide 28: ERI Key Financial Metrics
SSS ERI Key Financial Metrics $ in thousands 2011 2010 Revenue $28,047 $45,853 Gross Margin 28% 48% Net Income ($26,443) ($3,608) EPS ($0.50) ($0.07) Cash & Equivalents $52,330 $62,218 Shares Outstanding 52,645 52,596 Market Capitalization $135,824 $192,501 NOTE: Cash & Equivalents include restricte