Energy Recovery, Inc. (Nasdaq:ERII) (“Energy Recovery” or the “Company”) today announced its financial results for the third quarter and nine months ended September 30, 2023.
Third Quarter Highlights
- Revenue of $37.0 million, exceeding the upper end of our guidance which was attributed to an increase in megaproject revenues.
- Gross margin of 69.9%, higher than our estimates due to a change in product mix coupled with an increase in sales of our PX®.
- Operating expenses of $16.7 million, in line with prior quarters.
- Income from operations of $9.1 million.
- Net income of $9.7 million and adjusted EBITDA(1) of $12.0 million
- Cash and investments of $105.9 million, which include cash, cash equivalents, and short-term and long-term investments.
- Issued our annual Sustainability Report, which includes our commitment to reduce our emissions in relation to revenue by 65% by 2026. The full Sustainability Report can be found on our Sustainability page at energyrecovery.com.
David Moon, Interim Chief Executive Officer, commented on the financial results, “We delivered strong third quarter results, beating the upper end of our guidance for the quarter and we remain well-positioned to deliver on our overall Water guidance for the full year. As we look to 2024, we see growth in desalination for the 10th consecutive year despite a challenging macroeconomic environment and project to potentially double wastewater revenue in 2024. Further, we continue to see a path to our 2026 water revenue targets.”
Mr. Moon added, “In our CO2 business, we have a number of new installations of our PX G1300 planned for the fourth quarter, have received repeat orders for additional deployments from current end-users, and are currently in advanced talks with a number of national, and multi-national, supermarket chains in Europe and the United States. We were also awarded the Refrigeration Innovation of the Year for the XTE by RAC Cooling Industry Awards, together with our partner Epta, for Epta’s next-generation commercial CO2 refrigeration system, which utilizes the PX G1300. This award provides further third-party validation of our technology. It’s an exciting time to join the Energy Recovery team as the Interim President and CEO, and I look forward to working with the management team to help ensure we make substantial progress in 2024.”
Financial Highlights
|
Quarter-to-Date |
|
|
Year-to-Date |
||||||||
|
Q3’2023 |
|
Q3’2022 |
|
vs. Q3’2022 |
|
|
2023 |
|
2022 |
|
2023 vs. 2022 |
|
(In millions, except net income per share, percentages and basis points) |
|||||||||||
Revenue |
$37.0 |
|
$30.5 |
|
up 22% |
|
|
$71.2 |
|
$83.3 |
|
down 15% |
Gross margin |
69.9% |
|
69.1% |
|
up 80 bps |
|
|
66.9% |
|
69.0% |
|
down 210 bps |
Operating margin |
24.7% |
|
16.1% |
|
up 860 bps |
|
|
(2.2%) |
|
12.3% |
|
NM |
Net income |
$9.7 |
|
$4.8 |
|
up 102% |
|
|
$1.7 |
|
$10.3 |
|
down 84% |
Net income per share |
$0.17 |
|
$0.08 |
|
up 113% |
|
|
$0.03 |
|
$0.18 |
|
down 83% |
Effective tax rate |
|
|
|
|
|
|
|
(114.2%) |
|
3.5% |
|
|
Cash provided by (used for) operations |
$7.7 |
|
($1.2) |
|
|
|
|
$12.3 |
|
$6.3 |
|
|
Non-GAAP Financial Highlights (1)
|
Quarter-to-Date |
|
|
Year-to-Date |
||||||||
|
Q3’2023 |
|
Q3’2022 |
|
vs. Q3’2022 |
|
|
2023 |
|
2022 |
|
2023 vs. 2022 |
|
(In millions, except adjusted net income per share, percentages and basis points) |
|||||||||||
Adjusted operating margin |
29.5% |
|
22.4% |
|
up 710 bps |
|
|
6.0% |
|
20.3% |
|
NM |
Adjusted net income |
$11.4 |
|
$6.5 |
|
up 76% |
|
|
$6.8 |
|
$15.8 |
|
down 57% |
Adjusted net income per share |
$0.20 |
|
$0.12 |
|
up 67% |
|
|
$0.12 |
|
$0.28 |
|
down 57% |
Adjusted effective tax rate |
|
|
|
|
|
|
|
(3.5%) |
|
9.1% |
|
|
Adjusted EBITDA |
$12.0 |
|
$7.7 |
|
|
|
|
$7.3 |
|
$19.8 |
|
|
Free cash flow |
$7.4 |
|
($1.6) |
|
|
|
|
$11.1 |
|
$3.3 |
|
|
| _______________ | ||
NM |
Not material |
|
(1) |
Refer to the sections “Use of Non-GAAP Financial Measures” and “Reconciliation of Non-GAAP Financial Measures” for definition of adjustment to GAAP presentation. |
|
Forward-Looking Statements
Certain matters discussed in this press release and on the conference call are “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, including our belief that the Company is well positioned to deliver on full year water guidance; our belief that desalination revenue may grow in 2024; our belief that wastewater revenue may potentially double in 2024; and our belief that a path to 2026 water revenue targets exist. These forward-looking statements are based on information currently available to us and on management’s beliefs, assumptions, estimates, or projections and are not guarantees of future events or results. Potential risks and uncertainties include risks relating to the future demand for our products, risks relating to performance by our customers and third-party partners, risks relating to the timing of revenue, and any other factors that may have been discussed herein regarding the risks and uncertainties of the Company’s business, and the risks discussed under “Risk Factors” in the Company’s Form 10-K filed with the U.S. Securities and Exchange Commission (“SEC”) for the year ended December 31, 2022, as supplemented by the risks discussed under “Risk Factors” in our Quarterly Report on Form 10-Q for the quarter ended March 31, 2023, as well as other reports filed by the Company with the SEC from time to time. Because such forward-looking statements involve risks and uncertainties, the Company’s actual results may differ materially from the predictions in these forward-looking statements. All forward-looking statements are made as of today, and the Company assumes no obligation to update such statements.
Use of Non-GAAP Financial Measures
This press release includes certain non-GAAP financial measures, including adjusted operating margin, adjusted net income, adjusted net income per share, adjusted effective tax rate, adjusted EBITDA and free cash flow. Generally, a non-GAAP financial measure is a numerical measure of a company’s performance, financial position, or cash flows that either exclude or include amounts that are not normally excluded or included in the most directly comparable measure calculated and presented in accordance with generally accepted accounting principles in the United States of America, or GAAP. These non-GAAP financial measures do not reflect a comprehensive system of accounting, differ from GAAP measures with the same captions, and may differ from non-GAAP financial measures with the same or similar captions that are used by other companies. As such, these non-GAAP measures should be considered as a supplement to, and not as a substitute for, or superior to, financial measures calculated in accordance with GAAP. The Company uses these non-GAAP financial measures to analyze its operating performance and future prospects, develop internal budgets and financial goals, and to facilitate period-to-period comparisons. The Company believes these non-GAAP financial measures reflect an additional way of viewing aspects of its operations that, when viewed with its GAAP results, provide a more complete understanding of factors and trends affecting its business.
Notes to the Third Quarter Financial Results
- Adjusted operating margin is a non-GAAP financial measure that the Company defines as income (loss) from operations which excludes i) share-based compensation; and ii) non-core operational costs, such as VorTeq-related severance costs and accelerated depreciation, divided by revenues.
- Adjusted net income is a non-GAAP financial measure that the Company defines as net income which excludes i) share-based compensation; ii) non-core operational costs, such as VorTeq-related severance costs and accelerated depreciation; and iii) the applicable tax effect of the excluded items including the share-based compensation discrete tax item.
- Adjusted net income per share is a non-GAAP financial measure that the Company defines as net income, which excludes i) share-based compensation; ii) non-core operational costs, such as VorTeq-related severance costs and accelerated depreciation; and iii) the applicable tax effect of the excluded items including the share-based compensation discrete tax item, divided by basic shares outstanding.
- Adjusted effective tax rate reflects adjustments for share-based compensation discrete tax item, share-based compensation, and VorTeq-related severance costs and accelerated depreciation.
- Adjusted EBITDA is a non-GAAP financial measure that the Company defines as net income which excludes i) depreciation and amortization; ii) share-based compensation; iii) non-core operational costs, such as VorTeq-related severance costs; iv) other income, net, such as interest income and other non-operating expense, net; and v) provision for (benefit from) income taxes.
- Free cash flow is a non-GAAP financial measure that the Company defines as net cash provided by (used in) operating activities less capital expenditures.
Conference Call to Discuss Third Quarter 2023 Financial Results
LIVE CONFERENCE CALL:
Wednesday, November 1, 2023, 2:00 PM PT / 5:00 PM ET
Listen-only, US / Canada Toll-Free: +1 (877) 709-8150
Listen-only, Local / International Toll: +1 (201) 689-8354
CONFERENCE CALL REPLAY:
Expiration: December 1, 2023
US / Canada Toll-Free: +1 (877) 660-6853
Local / International Toll: +1 (201) 612-7415
Access code: 13741003
Investors may access the live call and the replay (approximately three hours after the live call concludes) over the internet on the “Events” page at: https://ir.energyrecovery.com/news-events/ir-calendar.
Disclosure Information
Energy Recovery uses the investor relations section on its website as means of complying with its disclosure obligations under Regulation FD. Accordingly, investors should monitor Energy Recovery’s investor relations website in addition to following Energy Recovery’s press releases, SEC filings, and public conference calls and webcasts.
About Energy Recovery
Energy Recovery (Nasdaq: ERII) is a trusted global leader in energy efficiency technology. Building on our pressure exchanger technology platform, we design and manufacture reliable, high-performance solutions that generate cost savings and increase energy efficiency across several industries. With a strong foundation in the desalination industry, Energy Recovery has delivered transformative solutions that optimize operations and deliver positive environmental impact to our customers worldwide for more than 30 years. Headquartered in the San Francisco Bay Area, Energy Recovery has manufacturing and research and development facilities across California and Texas with sales and on-site technical support available globally. To learn more, visit https://energyrecovery.com/.
ENERGY RECOVERY, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) |
|||||||
|
September 30, 2023 |
|
December 31, 2022 |
||||
|
(In thousands) |
||||||
ASSETS |
|
|
|
||||
Cash, cash equivalents and investments |
$ |
105,929 |
|
$ |
92,891 |
||
Accounts receivable and contract assets |
|
23,337 |
|
|
|
35,782 |
|
Inventories, net |
|
33,888 |
|
|
|
28,366 |
|
Prepaid expenses and other assets |
|
4,508 |
|
|
|
3,886 |
|
Property, equipment and operating leases |
|
30,639 |
|
|
|
32,695 |
|
Goodwill |
|
12,790 |
|
|
|
12,790 |
|
Deferred tax assets and other assets |
|
11,570 |
|
|
|
10,629 |
|
TOTAL ASSETS |
$ |
222,661 |
|
|
$ |
217,039 |
|
|
|
|
|
||||
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
||||
Liabilities |
|
|
|
||||
Accounts payable and accrued expenses |
$ |
13,211 |
|
|
$ |
15,507 |
|
Contract liabilities and other liabilities, non-current |
|
1,689 |
|
|
|
1,316 |
|
Lease liabilities |
|
13,732 |
|
|
|
14,878 |
|
Total liabilities |
|
28,632 |
|
|
|
31,701 |
|
|
|
|
|
||||
Stockholders’ equity |
|
194,029 |
|
|
|
185,338 |
|
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY |
$ |
222,661 |
|
|
$ |
217,039 |
|
ENERGY RECOVERY, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) |
|||||||||||||||
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
||||||||||||
|
2023 |
|
2022 |
|
2023 |
|
2022 |
||||||||
|
(In thousands, except per share data) |
||||||||||||||
Revenue |
$ |
37,036 |
|
$ |
30,462 |
|
$ |
71,160 |
|
|
$ |
83,300 |
|||
Cost of revenue |
|
11,154 |
|
|
|
9,417 |
|
|
|
23,580 |
|
|
|
25,835 |
|
Gross profit |
|
25,882 |
|
|
|
21,045 |
|
|
|
47,580 |
|
|
|
57,465 |
|
|
|
|
|
|
|
|
|
||||||||
Operating expenses |
|
|
|
|
|
|
|
||||||||
General and administrative |
|
7,369 |
|
|
|
7,608 |
|
|
|
21,704 |
|
|
|
21,155 |
|
Sales and marketing |
|
5,411 |
|
|
|
4,703 |
|
|
|
15,397 |
|
|
|
11,916 |
|
Research and development |
|
3,969 |
|
|
|
3,828 |
|
|
|
12,043 |
|
|
|
14,170 |
|
Total operating expenses |
|
16,749 |
|
|
|
16,139 |
|
|
|
49,144 |
|
|
|
47,241 |
|
Income (loss) from operations |
|
9,133 |
|
|
|
4,906 |
|
|
|
(1,564 |
) |
|
|
10,224 |
|
Other income, net |
|
1,045 |
|
|
|
254 |
|
|
|
2,357 |
|
|
|
477 |
|
Income before income taxes |
|
10,178 |
|
|
|
5,160 |
|
|
|
793 |
|
|
|
10,701 |
|
Provision for (benefit from) income taxes |
|
518 |
|
|
|
371 |
|
|
|
(906 |
) |
|
|
377 |
|
Net income |
$ |
9,660 |
|
|
$ |
4,789 |
|
|
$ |
1,699 |
|
|
$ |
10,324 |
|
|
|
|
|
|
|
|
|
||||||||
Net income per share |
|
|
|
|
|
|
|
||||||||
Basic |
$ |
0.17 |
|
|
$ |
0.09 |
|
|
$ |
0.03 |
|
|
$ |
0.18 |
|
Diluted |
$ |
0.17 |
|
|
$ |
0.08 |
|
|
$ |
0.03 |
|
|
$ |
0.18 |
|
|
|
|
|
|
|
|
|
||||||||
Number of shares used in per share calculations |
|
|
|
|
|
|
|
||||||||
Basic |
|
56,443 |
|
|
|
55,881 |
|
|
|
56,346 |
|
|
|
56,291 |
|
Diluted |
|
57,969 |
|
|
|
57,372 |
|
|
|
57,761 |
|
|
|
57,708 |
|
ENERGY RECOVERY, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) |
|||||||
|
Nine Months Ended September 30, |
||||||
|
2023 |
|
2022 |
||||
|
(In thousands) |
||||||
Cash flows from operating activities: |
|
|
|
||||
Net income |
$ |
1,699 |
|
|
$ |
10,324 |
|
Non-cash adjustments |
|
8,817 |
|
|
|
11,136 |
|
Net cash provided by (used in) operating assets and liabilities |
|
1,756 |
|
|
|
(15,192 |
) |
Net cash provided by operating activities |
|
12,272 |
|
|
|
6,268 |
|
|
|
|
|
||||
Cash flows from investing activities: |
|
|
|
||||
Net investment in marketable securities |
|
(17,278 |
) |
|
|
(1,857 |
) |
Capital expenditures |
|
(1,179 |
) |
|
|
(2,999 |
) |
Proceeds from sales of fixed assets |
|
82 |
|
|
|
734 |
|
Net cash used in investing activities |
|
(18,375 |
) |
|
|
(4,122 |
) |
|
|
|
|
||||
Cash flows from financing activities: |
|
|
|
||||
Net proceeds from issuance of common stock |
|
1,184 |
|
|
|
2,244 |
|
Repurchase of common stock |
|
— |
|
|
|
(26,654 |
) |
Net cash provided by (used in) financing activities |
|
1,184 |
|
|
|
(24,410 |
) |
|
|
|
|
||||
Effect of exchange rate differences |
|
27 |
|
|
|
38 |
|
Net change in cash, cash equivalents and restricted cash |
$ |
(4,892 |
) |
|
$ |
(22,226 |
) |
Cash, cash equivalents and restricted cash, end of period |
$ |
51,566 |
|
|
$ |
52,235 |
|
ENERGY RECOVERY, INC. SUPPLEMENTAL FINANCIAL INFORMATION (Unaudited) |
|||||||||||||||||||
Channel Revenue |
|||||||||||||||||||
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
||||||||||||||||
|
2023 |
2022 |
|
vs. 2022 |
|
2023 |
|
2022 |
|
vs. 2022 |
|||||||||
|
(In thousands, except percentages) |
||||||||||||||||||
Megaproject |
$ |
26,829 |
|
$ |
17,347 |
|
up 55% |
|
$ |
42,283 |
|
$ |
51,257 |
|
down 18% |
||||
Original equipment manufacturer |
|
5,307 |
|
|
|
9,032 |
|
|
down 41% |
|
|
16,845 |
|
|
|
21,392 |
|
|
down 21% |
Aftermarket |
|
4,900 |
|
|
|
4,083 |
|
|
up 20% |
|
|
12,032 |
|
|
|
10,651 |
|
|
up 13% |
Total revenue |
$ |
37,036 |
|
|
$ |
30,462 |
|
|
up 22% |
|
$ |
71,160 |
|
|
$ |
83,300 |
|
|
down 15% |
Segment Activity |
|||||||||||||||||||||||||||||||
|
Three Months Ended September 30, 2023 |
|
Three Months Ended September 30, 2022 |
||||||||||||||||||||||||||||
|
Water |
|
Emerging Technologies |
|
Corporate |
|
Total |
|
Water |
|
Emerging Technologies |
|
Corporate |
|
Total |
||||||||||||||||
|
(In thousands) |
||||||||||||||||||||||||||||||
Revenue |
$ |
36,812 |
|
$ |
224 |
|
|
$ |
— |
|
|
$ |
37,036 |
|
$ |
30,462 |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
30,462 |
||||
Cost of revenue |
|
11,114 |
|
|
|
40 |
|
|
|
— |
|
|
|
11,154 |
|
|
|
9,417 |
|
|
|
— |
|
|
|
— |
|
|
|
9,417 |
|
Gross profit |
|
25,698 |
|
|
|
184 |
|
|
|
— |
|
|
|
25,882 |
|
|
|
21,045 |
|
|
|
— |
|
|
|
— |
|
|
|
21,045 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Operating expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
General and administrative |
|
2,039 |
|
|
|
1,061 |
|
|
|
4,269 |
|
|
|
7,369 |
|
|
|
1,911 |
|
|
|
878 |
|
|
|
4,819 |
|
|
|
7,608 |
|
Sales and marketing |
|
3,272 |
|
|
|
1,560 |
|
|
|
579 |
|
|
|
5,411 |
|
|
|
3,242 |
|
|
|
960 |
|
|
|
501 |
|
|
|
4,703 |
|
Research and development |
|
1,098 |
|
|
|
2,871 |
|
|
|
— |
|
|
|
3,969 |
|
|
|
1,216 |
|
|
|
2,612 |
|
|
|
— |
|
|
|
3,828 |
|
Total operating expenses |
|
6,409 |
|
|
|
5,492 |
|
|
|
4,848 |
|
|
|
16,749 |
|
|
|
6,369 |
|
|
|
4,450 |
|
|
|
5,320 |
|
|
|
16,139 |
|
Operating income (loss) |
$ |
19,289 |
|
|
$ |
(5,308 |
) |
|
$ |
(4,848 |
) |
|
$ |
9,133 |
|
|
$ |
14,676 |
|
|
$ |
(4,450 |
) |
|
$ |
(5,320 |
) |
|
$ |
4,906 |
|
|
Nine Months Ended September 30, 2023 |
|
Nine Months Ended September 30, 2022 |
||||||||||||||||||||||||||||
|
Water |
|
Emerging Technologies |
|
Corporate |
|
Total |
|
Water |
|
Emerging Technologies |
|
Corporate |
|
Total |
||||||||||||||||
|
(In thousands) |
||||||||||||||||||||||||||||||
Revenue |
$ |
70,622 |
|
|
$ |
538 |
|
|
$ |
— |
|
|
$ |
71,160 |
|
|
$ |
83,191 |
|
|
$ |
109 |
|
|
$ |
— |
|
|
$ |
83,300 |
|
Cost of revenue |
|
23,136 |
|
|
|
444 |
|
|
|
— |
|
|
|
23,580 |
|
|
|
25,817 |
|
|
|
18 |
|
|
|
— |
|
|
|
25,835 |
|
Gross profit |
|
47,486 |
|
|
|
94 |
|
|
|
— |
|
|
|
47,580 |
|
|
|
57,374 |
|
|
|
91 |
|
|
|
— |
|
|
|
57,465 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Operating expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
General and administrative |
|
5,837 |
|
|
|
2,976 |
|
|
|
12,891 |
|
|
|
21,704 |
|
|
|
4,909 |
|
|
|
3,140 |
|
|
|
13,106 |
|
|
|
21,155 |
|
Sales and marketing |
|
9,567 |
|
|
|
4,171 |
|
|
|
1,659 |
|
|
|
15,397 |
|
|
|
8,197 |
|
|
|
2,120 |
|
|
|
1,599 |
|
|
|
11,916 |
|
Research and development |
|
3,121 |
|
|
|
8,922 |
|
|
|
— |
|
|
|
12,043 |
|
|
|
3,159 |
|
|
|
11,011 |
|
|
|
— |
|
|
|
14,170 |
|
Total operating expenses |
|
18,525 |
|
|
|
16,069 |
|
|
|
14,550 |
|
|
|
49,144 |
|
|
|
16,265 |
|
|
|
16,271 |
|
|
|
14,705 |
|
|
|
47,241 |
|
Operating income (loss) |
$ |
28,961 |
|
|
$ |
(15,975 |
) |
|
$ |
(14,550 |
) |
|
$ |
(1,564 |
) |
|
$ |
41,109 |
|
|
$ |
(16,180 |
) |
|
$ |
(14,705 |
) |
|
$ |
10,224 |
|
Share-based Compensation |
|||||||||||||||
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
||||||||||||
|
2023 |
|
2022 |
|
2023 |
|
2022 |
||||||||
|
(In thousands) |
||||||||||||||
Stock-based compensation expense charged to: |
|
|
|
|
|
|
|
||||||||
Cost of revenue |
$ |
158 |
|
$ |
124 |
|
$ |
555 |
|
$ |
370 |
||||
General and administrative |
|
905 |
|
|
|
743 |
|
|
|
2,628 |
|
|
|
2,735 |
|
Sales and marketing |
|
436 |
|
|
|
426 |
|
|
|
1,684 |
|
|
|
1,232 |
|
Research and development |
|
292 |
|
|
|
205 |
|
|
|
944 |
|
|
|
767 |
|
Total stock-based compensation expense |
$ |
1,791 |
|
|
$ |
1,498 |
|
|
$ |
5,811 |
|
|
$ |
5,104 |
|
ENERGY RECOVERY, INC. RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (1) (Unaudited) |
|||||||||||||||
This press release includes certain non-GAAP financial information because we plan and manage our business using such information. The following table reconciles the GAAP financial information to the non-GAAP financial information. |
|||||||||||||||
|
Quarter-to-Date |
|
Year-to-Date |
||||||||||||
|
Q3'2023 |
|
Q3'2022 |
|
Q3'2023 |
|
Q3'2022 |
||||||||
|
(In millions, except shares, per share and percentages) |
||||||||||||||
Operating margin |
|
24.7 |
% |
|
|
16.1 |
% |
|
|
(2.2 |
%) |
|
|
12.3 |
% |
Share-based compensation |
|
4.8 |
|
|
|
4.9 |
|
|
|
8.2 |
|
|
|
6.1 |
|
Severance |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
0.4 |
|
Accelerated depreciation |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
1.0 |
|
Litigation charges |
|
— |
|
|
|
1.4 |
|
|
|
— |
|
|
|
0.5 |
|
Adjusted operating margin |
|
29.5 |
% |
|
|
22.4 |
% |
|
|
6.0 |
% |
|
|
20.3 |
% |
|
|
|
|
|
|
|
|
||||||||
Net income |
$ |
9.7 |
|
|
$ |
4.8 |
|
|
$ |
1.7 |
|
|
$ |
10.3 |
|
Share-based compensation (2) |
|
1.8 |
|
|
|
1.5 |
|
|
|
5.8 |
|
|
|
5.1 |
|
Severance (2) |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
0.3 |
|
Accelerated depreciation (2) |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
0.7 |
|
Litigation charges (2) |
|
— |
|
|
|
0.4 |
|
|
|
— |
|
|
|
0.4 |
|
Other (2) |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Share-based compensation discrete tax item |
|
(0.1 |
) |
|
|
(0.2 |
) |
|
|
(0.7 |
) |
|
|
(1.0 |
) |
Adjusted net income |
$ |
11.4 |
|
|
$ |
6.5 |
|
|
$ |
6.8 |
|
|
$ |
15.8 |
|
|
|
|
|
|
|
|
|
||||||||
Net income per share |
$ |
0.17 |
|
|
$ |
0.08 |
|
|
$ |
0.03 |
|
|
$ |
0.18 |
|
Adjustments to net income per share (3) |
|
0.03 |
|
|
|
0.04 |
|
|
|
0.09 |
|
|
|
0.10 |
|
Adjusted net income per share |
$ |
0.20 |
|
|
$ |
0.12 |
|
|
$ |
0.12 |
|
|
$ |
0.28 |
|
|
|
|
|
|
|
|
|
||||||||
Effective tax rate |
|
|
|
|
|
(114.2 |
%) |
|
|
3.5 |
% |
||||
Adjustments to effective tax rate (3) |
|
|
|
|
|
110.7 |
|
|
|
5.6 |
|
||||
Adjusted effective tax rate |
|
|
|
|
|
(3.5 |
%) |
|
|
9.1 |
% |
||||
|
|
|
|
|
|
|
|
||||||||
Net income |
$ |
9.7 |
|
|
$ |
4.8 |
|
|
$ |
1.7 |
|
|
$ |
10.3 |
|
Share-based compensation |
|
1.8 |
|
|
|
1.5 |
|
|
|
5.8 |
|
|
|
5.1 |
|
Severance |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
0.3 |
|
Depreciation and amortization |
|
1.1 |
|
|
|
0.9 |
|
|
|
3.1 |
|
|
|
3.8 |
|
Litigation charges |
|
— |
|
|
|
0.4 |
|
|
|
— |
|
|
|
0.4 |
|
Other |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Other income, net |
|
(1.0 |
) |
|
|
(0.3 |
) |
|
|
(2.4 |
) |
|
|
(0.5 |
) |
Provision for (benefit from) income taxes |
|
0.5 |
|
|
|
0.4 |
|
|
|
(0.9 |
) |
|
|
0.4 |
|
Adjusted EBITDA |
$ |
12.0 |
|
|
$ |
7.7 |
|
|
$ |
7.3 |
|
|
$ |
19.8 |
|
|
|
|
|
|
|
|
|
||||||||
Free cash flow |
|
|
|
|
|
|
|
||||||||
Net cash provided by (used in) operating activities |
$ |
7.7 |
|
|
$ |
(1.2 |
) |
|
$ |
12.3 |
|
|
$ |
6.3 |
|
Capital expenditures |
|
(0.3 |
) |
|
|
(0.4 |
) |
|
|
(1.2 |
) |
|
|
(3.0 |
) |
Free cash flow |
$ |
7.4 |
|
|
$ |
(1.6 |
) |
|
$ |
11.1 |
|
|
$ |
3.3 |
|
| _______________ | ||
(1) |
Amounts may not total due to rounding. |
|
(2) |
Amount presented are net of tax. |
|
(3) |
Refer to the sections “Use of Non-GAAP Financial Measures” for description of items included in adjustments. |
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20231101635811/en/
Contacts
Investor Relations
ir@energyrecovery.com
+1 (346) 382-6927
