Energy Recovery, Inc. · NASDAQ:ERII
Energy Recovery — Investor Presentation (June 2012)
22 slides from Energy Recovery's investor presentation, Jun 5, 2012
Slide 1: Investor Presentation
ERI Energy Recovery Inc nas Investor Presentation June 5, 2012
Slide 2: Safe Harbor
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 statements about market trends, possible future revenue growth, and business strategy
Slide 3: Who We Are - ERI (NASDAQ: ERI)
Who We Are - ERI (NASDAQ: ERI) Over a decade of experience A proven technology with hundreds of references A global market leader with 70% market share Tackling global problem of water & energy Saving ~10B kWh / year ERI saves clients over f—™N $1 billion peryear bg in energy costs (ext —— ~“«— 2
Slide 4: Our Vision
Our Vision To make industrial processes greener and more profitable by transforming fluid flows into reusable energy. Continuous innovation and collaboration with industry Industrial profitability and environmental responsibility OUR VISION: Transform the world’s untapped energy into reusable energy
Slide 5: What Problem We Solve
What Problem We Solve Our technology harnesses the world’s untapped energy from fluid flows + Most industrial processes run sub-optimally + Fluids are currently pumped inefficiently + Industrial processes waste hundreds of billions of dollars in fluid energy ERI — ss
Slide 6: Desalination Without Energy Recovery
Desalination Without Energy Recovery ERI —_—
Slide 7: Our Solution
Our Solution Desalination With Energy Recovery ERI-PX® Technology { * PX solution recycles lost pressure energy | from the waste stream at 98% efficiency « Less pumping energy required * Generates ~60% energy savings.
Slide 8: Our Technology is Special
Our Technology is Special 4 Best Economic Solution in Energy Recovery. Ever. * Highest Efficiency Design * Ceramic Material Science Advantage + Simple, Plug-n-Play Solution * Extreme Durability - Zero Maintenance for 25 years + Numerous US. and International Patents
Slide 9: 12,000 Devices in 30+ Countries on Continents
12,000 Devices in 30+ Countries on 7 Continents A Leader in This Industry Worldwide HEADQUARTERS ‘San Leandro, California, USA. Madrid, Spain Dubai, UAE ‘Shanghai, China S x == J vA f CO Salesoffices © Device Installations 6 Future Growth Markets (iy
Slide 10: Clients Include the World's Largest Companies
Clients Include the World’s Largest Companies Inima BEFESA *Aqualia Grupo OHL Ge Hyflux’ ©. te: A Qacciona “4S IDE acnuin co [ENGINEERING] Aquatech technologies Id, GE Water & Process ©S& Technologies Cadagua (0) VEOLIA A, czrea is tested and proven } = (ext —_— i ~—« 9
Slide 11: Most Advanced Product with Highest Cost Efficiency
Most Advanced Product with Highest Cost Efficiency Isobaric Technologies H 98% ENERGY SAVINGS/ EFFICIENCY = Centrifugal Technologies 80% 40
Slide 12: Fundamentals for Desalination are Strong
Fundamentals for Desalination are Strong Desalination Market Size (1980 - 2015) Additional RO capacity (m3/d) 12,000,000 snpon004, 000000 F re : : : qn : : 4.000000 2.00000 1995 2000 2005 2010 2015 1980 1985 1990 ert —— ‘Source: GW! Market Forecast (March 2012) 41
Slide 13: ERI Well Positioned to Lead the Market in Recovery
ERI Well Positioned to Lead the Market in Recovery Global capital expenditure on ERDs = GWIERD Market - Actual = GWIERD Market - Forecast In thousands $200,000 Expected Industry I Growth of 25%+ y $150,000 Emerging Markets in China, India, Oman, Qatar Demand forwaterfor $100,000 Collapse of Credit M
Slide 14: ERI Also Affected by Deep Recession
ERI Also Affected by Deep Recession mRevenue © EPS- diluted Collapse of Earnings per-share diluted Credit In thousands Mares $60,000 $0.30 $0.18 $0.20 $50,000 $0.10 $0. $40,000 s ‘$35,414 $(0.07) $(0.10) $30,000 $28,047 $(0.20) 20,058 $20,000 a $(0.30) $10,689 a $(0.40) $10,000 $4,045 $4,047 $(0.50)
Slide 15: Key Initiatives by ERI
3 key Initiatives by ERI 1. Streamline Costs 2. Repositioning 3. Diversification
Slide 16: 1. Streamline Costs, We Are a Leaner Company
1. Streamline Costs, We Are a Leaner Company @& Initiative Result * Consolidation of Production Operations: * Vertical integration and Increased Utilization + $3.5M annual ongoing savings exclusive of + Reduction of Corporate Overhead:
Slide 17: Repositioned Product with Clear Economic Savings
Repositioned Product with Clear Economic Savings iy) os New Value Proposition focused on total economics + Best Economic Solution in Energy Recovery. Ever. * Lowest Lifecycle Costs 90% Market Share Over Past 10 Months « Plant Uptime 99.8% Availability Advantage / + Highest Guaranteed Efficiencies -
Slide 18: Leveraging Strength to Diversify into New Markets
Leveraging Strength to Diversify into New Markets Stage 1 Stage 2 Desalination Oil & Gas Water Mining S Chemical / Ceramics Processing $200M $1B $1.28 ADDRESSABLE ADDRESSABLE ADDRESSABLE MARKET MARKET MARKET New markets worth est. $2.4 Billion a7
Slide 19: With Early Success to Show in New Markets
With Early Success to Show in New Markets Significant progress in new Oil & Gas market * Maintaining Technology Lead - Over $3.5 M in R&D + The Right Partners — Partnerships with 3 of the world’s largest oil giants on 3 continents + Early traction - 5 devices scheduled to be shipped before year-end
Slide 20: ERI Well Positioned to Lead the Market in Recovery
ERI Well Positioned to Lead the Market in Recovery MERI Revenue ® ERI Revenue (5-Year Strategic Forecast) {n thousands: @ Addition of Diversified Markets (e.g. Oil & Gas ) $200,000 $150,000 $100,000 ERI GROWTH + Well-positioned for rebound $50,000 + Expect to maintain dominant position + Establish a
Slide 21: Energy Recovery Inc
ENERGY RECOVERY INC 20
Slide 22: ERI Key Financial Metrics
ERI Key Financial Metrics 2011 2010 VAR 2010 Revenue $28,047 $45,853 “38.8% $45,853 Gross Margin % 27.8% 48.14% -20.3% 0.00% EBIT% -90.2% -10.96% -79.2% 0.00% Net Income ($26,443) ($3,608) ($3,608) EPS ($0.50) ($0.07) ($0.43) ($0.07) Cash & Equivalents $52,330 $62,218 ($9,888) $59,974 Shares Outstan