Energy Recovery, Inc. Files 2023 Annual Report on Form 10-K

TL;DR

<b>Energy Recovery, Inc. has submitted its 2023 annual report detailing its financial performance and business operations.</b>

AI Summary

Energy Recovery, Inc. (ERII) filed a Annual Report (10-K) with the SEC on February 21, 2024. Energy Recovery, Inc. filed its 2023 Form 10-K on February 21, 2024. The filing covers the fiscal year ending December 31, 2023. The company is incorporated in Delaware and operates in the Special Industry Machinery sector. Its principal business address is 1717 Doolittle Drive, San Leandro, CA 94577. The filing number is 001-34112.

Why It Matters

For investors and stakeholders tracking Energy Recovery, Inc., this filing contains several important signals. This 10-K filing provides a comprehensive overview of Energy Recovery's financial health, operational strategies, and risk factors for the fiscal year 2023, crucial for investors and stakeholders to assess the company's performance and future outlook. The detailed financial statements and disclosures within the report are essential for understanding the company's revenue streams, profitability, and balance sheet strength, enabling informed investment decisions.

Risk Assessment

Risk Level: medium — Energy Recovery, Inc. shows moderate risk based on this filing. The company operates in the Special Industry Machinery sector, which can be subject to market fluctuations and technological advancements, posing medium-term risks to sustained growth and profitability.

Analyst Insight

Review the detailed financial statements and management's discussion and analysis in the 10-K to understand Energy Recovery's performance drivers and identify potential investment opportunities or risks.

Key Numbers

• 2023-12-31 — Fiscal Year End (Reporting period)
• 2024-02-21 — Filing Date (Date of submission)
• 001-34112 — SEC File Number (SEC registration number)
• 3559 — SIC Code (Standard Industrial Classification)

Key Players & Entities

• Energy Recovery, Inc. (company) — Filer name
• ERII (company) — Ticker symbol
• 10-K (filing) — Form type
• 2024-02-21 (date) — Filing date
• 2023-12-31 (date) — Fiscal year end
• San Leandro, CA (location) — Business address city and state
• 001-34112 (filing) — SEC file number
• 3559 (industry) — Standard Industrial Classification

FAQ

Industry Context

Energy Recovery, Inc. operates within the Special Industry Machinery sector, which involves the design, manufacturing, and sale of specialized machinery and equipment.

Regulatory Implications

The company is subject to standard SEC regulations for public companies, including the requirement to file annual reports (10-K) detailing financial performance and business operations.

What Investors Should Do

1. Analyze the financial statements within the 10-K to understand revenue trends, profitability, and cost structures.
2. Review the 'Risk Factors' section to identify potential challenges and their impact on the company's future performance.
3. Examine the 'Management's Discussion and Analysis of Financial Condition and Results of Operations' for insights into strategic decisions and operational performance.

Key Dates

• 2024-02-21: Form 10-K Filing — Annual report submission for fiscal year 2023.
• 2023-12-31: Fiscal Year End — End date of the reporting period.

Year-Over-Year Comparison

This filing represents the annual report for fiscal year 2023, providing updated financial and operational data compared to previous filings.

Key Financial Figures

• $0.001 — nge on which registered Common Stock, $0.001 par value ERII Nasdaq Stock Market

Filing Documents

• erii-20231231.htm (10-K) — 5133KB
• ex10132020incentiveplan.htm (EX-10.13) — 711KB
• ex211subsidiaries2023-q4.htm (EX-21.1) — 4KB
• ex231deloitte2023-q4.htm (EX-23.1) — 3KB
• ex311302ceo2023-q4.htm (EX-31.1) — 11KB
• ex312302cfo2023-q4.htm (EX-31.2) — 11KB
• ex3219062023-q4.htm (EX-32.1) — 8KB
• ex971compensationrecoveryp.htm (EX-97.1) — 49KB
• er_logoxprimaryxhorizxrgb.jpg (GRAPHIC) — 93KB
• erii-20231231_g1.jpg (GRAPHIC) — 93KB
• erii-20231231_g10.jpg (GRAPHIC) — 260KB
• erii-20231231_g11.gif (GRAPHIC) — 55KB
• erii-20231231_g2.jpg (GRAPHIC) — 97KB
• erii-20231231_g3.jpg (GRAPHIC) — 1368KB
• erii-20231231_g4.jpg (GRAPHIC) — 117KB
• erii-20231231_g5.jpg (GRAPHIC) — 334KB
• erii-20231231_g6.jpg (GRAPHIC) — 25KB
• erii-20231231_g7.jpg (GRAPHIC) — 304KB
• erii-20231231_g8.jpg (GRAPHIC) — 41KB
• erii-20231231_g9.jpg (GRAPHIC) — 123KB
• erilogo-s1000.jpg (GRAPHIC) — 203KB
• erilogo.jpg (GRAPHIC) — 10KB
• exhibit1012graph.jpg (GRAPHIC) — 67KB
• 0001421517-24-000055.txt (&nbsp;) — 26378KB
• erii-20231231.xsd (EX-101.SCH) — 64KB
• erii-20231231_cal.xml (EX-101.CAL) — 103KB
• erii-20231231_def.xml (EX-101.DEF) — 271KB
• erii-20231231_lab.xml (EX-101.LAB) — 844KB
• erii-20231231_pre.xml (EX-101.PRE) — 577KB
• erii-20231231_htm.xml (XML) — 3919KB

Business

Business 1 Item 1A

Risk Factors

Risk Factors 13 Item 1B Unresolved Staff Comments 25 Item 1C Cybersecurity 25 Item 2

Properties

Properties 27 Item 3

Legal Proceedings

Legal Proceedings 27 Item 4 Mine Safety Disclosures 27 PART II Item 5 Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 28 Item 6 [Reserved] 29 Item 7

Management's Discussion and Analysis of Financial Condition and Results of Operations

Management's Discussion and Analysis of Financial Condition and Results of Operations 30 Item 7A

Quantitative and Qualitative Disclosures About Market Risk

Quantitative and Qualitative Disclosures About Market Risk 40 Item 8

Financial Statements and Supplementary Data

Financial Statements and Supplementary Data 41 Item 9 Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 79 Item 9A

Controls and Procedures

Controls and Procedures 79 Item 9B Other Information 80 Item 9C Disclosure Regarding Foreign Jurisdictions that Prevent Inspections 80 PART III Item 10 Directors, Executive Officers and Corporate Governance 81 Item 11

Executive Compensation

Executive Compensation 81 Item 12

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters 81 Item 13 Certain Relationships and Related Transactions and Director Independence 82 Item 14 Principal Accounting Fees and Services 82 PART IV Item 15 Exhibits and Financial Statement Schedules 83 Item 16 Form 10-K Summary 84

Signatures

Signatures 85 Energy Recovery, Inc. | 2023 Form 10-K Annual Report Forward-Looking Information This Annual Report on Form 10-K for the year ended December 31, 2023 , including Part II, Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations" (the "MD&A"), contains forward-looking statements within the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements in this report include, but are not limited to, Forward-looking statements represent our current expectations about future events, are based on assumptions, and involve risks and uncertainties. If the risks or uncertainties occur or the assumptions prove incorrect, then our results may differ materially from those set forth or implied by the forward-looking statements. Our forward-looking statements are not guarantees of future performance or events. Words such as "expects," "anticipates," "aims," "projects," "intends," "plans," "believes," "estimates," "seeks," "continue," "could," "may," "potential," "should," "will," "would," variations of such words and similar expressions are also intended to identify such forward-looking actual results may differ materially and adversely from those expressed in any forward-looking statement. Readers are directed to risks and uncertainties identified under Part I, Item 1A, "Risk Factors," and elsewhere in this report for factors that may cause actual results to be different from those expressed in these forward-looking statements. Except as required by law, we undertake no obligation to revise or update publicly any forward-looking statement for any reason.

Forward-looking statements in this report include, without limitation, statements about the following

Forward-looking statements in this report include, without limitation, statements about the following: our belief that the pressure exchanger is the industry standard for energy recovery in the seawater reverse osmosis desalination (" SWRO ") industry; our belief that the scalability and versatility of our PX Pressure Exchanger (" PX ") can help us achieve success in emerging wastewater markets; our belief that the Ultra PX addresses key challenges associated with treating wastewater in a range of reverse osmosis (" RO ") applications; our belief that the Ultra PX addresses key challenges, such as energy intensity and environmental impacts associated with treating wastewater ; our belief that the Ultra PX can help make RO the preferred treatment option to achieve zero and minimum liquid discharge (" ZLD " and " MLD ", respectively) requirements by enhancing RO 's affordability and efficiency compared to thermal treatment options; our belief that our PX has helped make SWRO an economically viable and more sustainable option in the production of potable water; our expectation of greater demand of our PX in the wastewater market due to expanding environmental regulations; our belief that our hydraulic turbochargers deliver substantial savings, operational benefits and ease of integration into desalination systems; our anticipation that markets not traditionally associated with desalination, such as the United States of America (the "U.S.") and China will inevitably develop and provide further revenue growth opportunities; our belief that countries around the world will continue to mandate ZLD or MLD requirements for specific industries; our belief that, as the existing thermal technology is replaced with RO technology, demand for our products will be created; our belief that our PX offers market-leading value with the highest technological and economic benefit; our belief that ongoing operating costs and life cycle costs rather than t

— Business

Item 1 — Business Overview Energy Recovery, Inc. (the "Company", "Energy Recovery", "we", "our" and "us") is a trusted global leader in energy efficiency technology. We design and manufacture reliable, high-performanc e solutions that provide cost savings through improved energy efficiency in commercial and industrial processes, with applications across several industries . With a strong foundation in the desalination industry, we have delivered transformative solutions that help our customers optimize their operations and reduce their energy consumption for more than 30 years. We believe that our customers do not have to sacrifice quality and cost savings for sustainability; and we are committed to developing solutions that drive long-term value from a technical, financial, and environmental perspective. We have been incorporated in the state of Delaware since 2001. Our corporate headquarters, principal research and development (" R&D "), and manufacturing facility is located in San Leandro, California. In addition, we have manufacturing and warehouse space in Tracy, California and offices, warehouse space and a yard in Katy, Texas. We have a global direct sales team and on-site technical support staff to service customers in the United States of America (the "U.S.") , Europe, Latin America , the Middle East, and Asia. Sustainability Our technology harnesses the powerful combination of performance and energy efficiency to deliver operational profitability and help our customers achieve environmentally sustainable operations. As such, we are committed to measuring and managing our own operational impact, as well as producing high-quality energy recovery devices for our customers. While sustainability has always been central to our business, four years ago we embarked on our formal sustainability journey to turn the lens on ourselves and provide our stakeholders with further transparency around our company. Our integrated sustainability strategy i

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View this 10-K filing on SEC EDGAR