Energy Recovery Inc
For the period ended Sep 30, 2024. Filed Oct 30, 2024.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2024 · Filed Oct 30, 2024
ERII$7.15+6.6%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-06-30; filed 2024-07-31.
0001421517-24-000172
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-09-30; filed 2024-10-30.
0001421517-24-000191
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 193 previous paragraphs and 207 current paragraphs.
89 unchanged; 75 reworded; 38 added; 26 removed; 3 previous and 5 current paragraphs rearranged.
Tables are not compared: 10 previous and 10 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (38)
Current report
•Desalination: The decrease in revenue of $0.6 million was due primarily to lower shipments of products to the Americas and
Current report
•Wastewater: The increase in revenue of $2.8 million was due primarily to higher shipments of products to the MEA market.
Current report
Thedecrease in OEM revenueof$0.4 million was due primarily to:
Current report
•Desalination: The decrease in revenue of $0.6 million was due primarily to lower shipments of products to the Asia and Americas
Current report
markets, partially offset by higher shipments of products to the MEA and Europe markets.
Current report
•Wastewater: The increase in revenue of $0.3 million was due primarily to higher shipments of products to the Asia market,
Current report
partially offset by lower shipments of products to the Europe and Americas markets.
Current report
Nine months ended September 30, 2024, as compared to thenine months ended September 30, 2023
Current report
•Desalination: The increase in revenue of $3.8 million was due primarily to higher shipments of products to the MEA, Asia and
Current report
Europe markets, partially offset by lower shipments of products to the Americas market.
Current report
•Wastewater: The increase in revenue of $2.8 million was due primarily to higher shipments of products to the MEA market.
Current report
•Desalination: The decrease in revenue of $0.5 million was due primarily to lower shipments of products to the Asia and Americas
Current report
markets, partially offset by higher shipments of products to the MEA and Europe markets.
Current report
largest decrease in the Europe market.
Current report
producer in the Americas, both occurring in the prior year.
Current report
markets, partially offset by lower shipments of product to the Asia market.
Current report
an increase in freight costs and indirect costs.
Current report
September 30, 2024, as compared to the prior year, was due primarily tohigher manufacturing costs and freight costs, partially offset by
Current report
average selling prices related to product mix.
Current report
below.
Current report
to an increase in headcount, and an increase in S&M and R&D share-based compensation expense, partially offset by lower marketing and
Current report
sales commission costs.
Current report
increase in share-based compensation expense and consultant costs, partially offset by lower sales commission costs.
Current report
increase was due primarily to an increase in research and development costs and consultant costs, partially offset by lower employee
Current report
compensation costs.
Current report
Nine months ended September 30, 2024, as compared to thenine months ended September 30, 2023
Current report
marketing costs and depreciation expense.
Current report
partially offset by lower marketing costs.
Current report
consulting costs related to the enhancement of our corporate growth strategy, partially offset by lower marketing costs.
Current report
release of California valuation allowance.
Current report
compensation windfalls and prior years’ discrete tax benefit largely related to increased tax credits.
Current report
benefits.
Current report
prior year, was due primarily to thefollowing factors:
Current report
•Inventory: an increase in cash used primarily related to the increase in PXs manufactured for project deliveries in the fourth
Current report
quarter of 2024 and early 2025; and
Current report
•Accrued liabilities: an increase in cash used primarily related toa decrease in employee compensation and benefits, and a
Current report
reduction of tax accruals.
Current report
year, was primarily driven by $3.8 million of net cash used forpurchases of marketable debt instruments.
Removed paragraphs (26)
Previous report
Theincrease in OEM revenueof$2.2 million was due primarily to:
Previous report
partially offset by adecrease in shipments to the Asia market.
Previous report
•Wastewater: Revenues were stable compared to the prior year, with anincrease in shipments to the Asia market, whichwas
Previous report
partially offset by adecrease in shipments to the Europe market.
Previous report
offset by lower shipments to the MEA market.
Previous report
Six months ended June 30, 2024, as compared to thesix months ended June 30, 2023
Previous report
specifically in the MEA and Americas markets, partially offset by lower shipments to the Asia market.
Previous report
•Desalination: The increase in revenue of $0.1 million was due primarily to higher shipments to the Europe and MEA markets,
Previous report
which were partially offset by lower shipments to the Asia market.
Previous report
included a large shipment to the Asia market.
Previous report
regarding our concentration of revenue.
Previous report
primarily to an increase in employee compensation costs, benefits costs, and share-based compensation expense all related to an increase
Previous report
in headcount in S&M, and other R&D costs.
Previous report
4.6%. This increase was due primarily to a higher share-based compensation expense related to additional headcount andan increase in
Previous report
employee severance costs.
Previous report
Six months ended June 30, 2024, as compared to thesix months ended June 30, 2023
Previous report
headcount in G&A, an increase in recruiting costs, and an increase in travel costs. In addition, the increase in non-employee operating
Previous report
business.
Previous report
based compensation windfalls.
Previous report
income that is reducing the effective tax rate of the projected U.S. FDII.
Previous report
year, was due primarily to the following factors:
Previous report
•Accounts payable: an increase in cash provided related to the timing of vendor invoices received and payments made on open
Previous report
vendor balances; and
Previous report
•Contract liabilities: an increase in cash provided related to the timing of customer deposits.
Previous report
wasprimarily driven by$26.6 million of net cash used for purchase of marketable debt instruments and a$0.2 million increase in cash used
Previous report
for capital expenditures.
Reworded paragraphs (75)
Previous wording
A discussion regarding our financial condition and results of operations for thethree and six months ended June 30, 2024, compared
Current wording
A discussion regarding our financial condition and results of operations for thethree and nine months ended September 30, 2024,
Previous wording
to thethree and six months ended June 30, 2023, is presented below.
Current wording
compared to thethree and nine months ended September 30, 2023, is presented below.
Previous wording
are large-scale in nature and generally have shipment timelines from 16 to 36 months from contract date.
Current wording
are large-scale in nature and generally have shipment timelines from 16 to 36 months from contract date. Recognition of
Previous wording
•Original Equipment Manufacturer (“OEM”) channel: The OEM channel describes where we sell into a wide variety of industries in
Current wording
•Original Equipment Manufacturer (“OEM”) channel: The OEM channel reflects sales to a wide variety of industries in the
Previous wording
the desalination, wastewater, and the refrigeration markets. This channel contains projects smaller in size and revenue, and of
Current wording
desalination, wastewater, and the refrigeration markets. This channel contains projects smaller in size and revenue, and of
Previous wording
replenishment of spare parts and supplies. Generally, the AM channel revenue has been increasing over time.
Current wording
replenishment of spare parts and supplies.
Previous wording
Theincrease in MPD revenue of$4.5 million was due primarily to customers’ project timing, and execution of these projects,
Current wording
Theincrease in MPD revenue of$2.2 million was due primarily to:
Previous wording
specifically related to an increase of shipments in the Middle East and Africa (“MEA”) and Asia markets.
Current wording
Middle East and Africa (“MEA”) markets, partially offset by higher shipments of products to the Asia and Europe markets.
Previous wording
•Emerging Technology: The decrease in revenue of $0.2 million was due primarily to an installment in Europe in the prior year.
Current wording
•Emerging Technology: The decrease in revenue of $0.1 million was due primarily to lower shipments of products.
Previous wording
Theincrease in AM revenue of$0.6 million was due primarily to higher shipments to the Americas, Asia and Europe markets, partially
Current wording
Thedecrease in AM revenue of$0.2 million was due primarily to lower shipments of products to the Asia market, partially offset by
Previous wording
•Desalination: The increase in revenue of $2.4 million was due primarily to higher shipments in the Europe and MEA markets,
Current wording
higher shipments of productsto the Europe and MEA markets.
Previous wording
Theincrease in MPD revenue of$3.6 million was due primarily to customers’ project timing, and execution of these projects and
Current wording
Theincrease in MPD revenue of$6.6 million was due primarily to:
Previous wording
Thedecrease in OEM revenue of$1.2 million was primarily due to:
Current wording
Thedecrease in OEM revenue of$1.6 million was primarily due to:
Previous wording
•Wastewater: The decrease in revenue of$1.2 million was due primarily to lower shipments in all markets. Prior year revenues
Current wording
•Wastewater: The decrease in revenueof $0.9 million was due primarily to lower shipments of products in all markets, with the
Previous wording
•Emerging Technology: The decrease in revenue of $0.2 million was due primarily to an installment in Europe in the prior year.
Current wording
•Emerging Technology: The decrease in revenue of $0.3 million was due primarily to an installment in Europe and sales to a gas
Previous wording
Theincrease in AM revenue of$2.0 million was due primarily to shipments to the Americas, Asia, and the MEA markets.
Current wording
Theincrease in AM revenue of$1.7 million was due primarilyto higher shipments of product to the Americas, Asia, and the MEA
Previous wording
See Note 10, “Concentrations – Revenue by Geographic Location and Country,”of the Notes to Condensed Consolidated Financial
Current wording
See Note 10, “Concentrations,”of the Notes to Condensed Consolidated Financial Statements in Part I, Item 1, “Financial Statements
Previous wording
Statements in Part I, Item 1, “Financial Statements (unaudited),” of this Quarterly Report on Form 10-Q (the “Notes”) for further discussion
Current wording
(unaudited),” of this Quarterly Report on Form 10-Q (the “Notes”) for further discussion regarding our concentration of revenue.
Previous wording
increase in sales of PXs, partially offset bya decrease in gross margin. Thedecrease in gross margin for the three andsix months ended
Current wording
decrease in gross margin, partially offset by an increase in sales of PXs. Thedecrease in gross margin for the three months ended
Previous wording
June 30, 2024, as compared to the prior year, was due primarily to higher manufacturing costs, partially offset by costs related toproduct mix.
Current wording
September 30, 2024, as compared to the prior year, was due primarilyto higher manufacturing costs, higher costs related toproduct mix, and
Previous wording
Theincrease in gross profit for the three andsix months ended June 30, 2024, as compared to the prior year, was due primarily toan
Current wording
Theincrease in gross profit for thenine months ended September 30, 2024, as compared to the prior year, was due primarily toan
Previous wording
(“R&D”) operating expenses for thethree and six months ended June 30, 2024, as compared to the comparable periods in the prior year, are
Current wording
(“R&D”) operating expenses for thethree and nine months ended September 30, 2024, as compared to the comparable periods in the prior
Previous wording
discussed within the following overall operating expenditures, and the segment and corporate operating expenses discussions below.
Current wording
year, are discussed within the following overall operating expenditures, and the segment and corporate operating expenses discussions
Previous wording
Overall Operating Expenditures. Overall operating expenditures of$37.6 million, increased by$5.3 million, or 16.2%. This increase
Current wording
Overall Operating Expenditures. Overall operating expenditures increased$1.3 million, or 7.8%. This increase wasdue primarily to
Previous wording
due primarily tohigher consulting costs related to the enhancement of our corporate growth strategy, G&A and S&M employee compensation
Current wording
higher consulting costs related to the enhancement of our corporate growth strategy, S&M employee compensation and benefit costs related
Previous wording
Water Segment. Water segment operating expenses of$6.8 million, increased by$1.0 million, or 17.2%. This increase was due
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Water Segment. Water segment operating expenses increased by$0.3 million, or 4.9%. This increase was due primarily to an
Previous wording
Emerging Technologies Segment. Emerging Technologies segment operating expenses of$5.6 million, increased by$0.2 million, or
Current wording
Emerging Technologies Segment. Emerging Technologies segment operating expenses increased by$0.2 million, or 3.9%. This
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Corporate Operating Expenses. Corporate operating expenses of$7.2 million, increased by$2.2 million, or 44.3%. This increase
Current wording
Corporate Operating Expenses. Corporate operating expenses increased by$0.8 million, or 16.0%. This increase was due primarily
Previous wording
was due primarily tohigher consulting costs related to the enhancement of our corporate growth strategy and an increase in employee
Current wording
tohigher consulting costs related to the enhancement of our corporate growth strategy and an increase in employee compensation costs.
Previous wording
Overall Operating Expenditures. Overall operating expenditures of$19.6 million, increased$3.5 million, or 21.4%. This increase was
Current wording
Overall Operating Expenditures. Overall operating expenditures increased by$6.6 million, or 13.4%. This increase was due primarily
Previous wording
compensation and benefits costs, recruiting costs, travel expenses, and an increase in share-based compensation expense due to
Current wording
benefit costs, recruiting costs, travel expenses, and an increase in share-based compensation expense due to modification of certain equity
Previous wording
equity awards and higher severance payments, both related to the termination of certain executive-level employees.
Current wording
awards and higher severance payments, both related to the termination of certain executive-level employees, partially offset by lower
Previous wording
Water Segment. Water segment operating expenses of$13.6 million, increased by$1.5 million, or 12.2%. This increase was due
Current wording
Water Segment. Water segment operating expenses increased by$1.8 million, or 9.7%. This increase was due primarily to higher
Previous wording
primarily to higher employee compensation and benefits costs and share-based compensation expense in S&M related to an increase in
Current wording
employee compensation and benefit costs and share-based compensation expense in S&M related to an increase in headcount to support
Previous wording
headcount to support our existing desalination operations and our growth in wastewater. In addition, non-employee operating expenses were
Current wording
our existing desalination operations and our growth in wastewater. In addition, non-employee operating expenses were higher due primarily
Previous wording
higher due primarily to an increase in consultant costs to support our growth in desalination and wastewater.
Current wording
to an increase in consultant costs to support our growth in desalination and wastewater.
Previous wording
Emerging Technologies Segment. Emerging Technologies operating expenses of$11.6 million, increased by$1.1 million, or 10.0%.
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Emerging Technologies Segment. Emerging Technologies operating expenses increased by$1.3 million, or 7.9%. This increase was
Previous wording
This increase was due primarily to higher employee compensation and benefits costs, and share-based compensation expense, both related
Current wording
due primarily to higher employee compensation and benefit costs, and share-based compensation expense, both related to an increase in
Previous wording
to an increase in headcount in S&M and R&D, and an increase in severance cost.
Current wording
headcount in S&M and R&D, an increase in research and development costs, higher consultant costs, and an increase in severance cost,
Previous wording
Corporate Operating Expenses. Corporate operating expenses of$12.4 million, increased by$2.7 million, or 28.1%. This increase
Current wording
Corporate Operating Expenses. Corporate operating expenses increased by$3.5 million, or 24.1%. This increase was due primarily
Showing the first 40 of 75 pairs. Open the source sections for the rest.
Rearranged current paragraphs (5)
Current report — wording carried from elsewhere
revenue is dependent oncustomers’ project timing and execution of these projects.
Current report — wording carried from elsewhere
Thedecrease in gross profit for the three months ended September 30, 2024, as compared to the prior year, was due primarily toa
Current report — wording carried from elsewhere
increase in sales of PXs, partially offset bya decrease in gross margin. Thedecrease in gross margin for thenine months ended
Current report — wording carried from elsewhere
tohigher consulting costs related to the enhancement of our corporate growth strategy and an increase in employee compensation and
Current report — wording carried from elsewhere
instruments of$76.7 million that are primarily invested in U.S. treasury securities, corporate notes and bonds, and municipal and agency
Rearranged previous paragraphs (3)
Previous report — wording carried elsewhere
was due primarilyto higher consulting costs related to the enhancement of our corporate growth strategy.
Previous report — wording carried elsewhere
modification of certain equity awards and higher severance payments, both related to the termination of certain executive-level employees.
Previous report — wording carried elsewhere
needs for at least the next 12 months.