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Dec 31, 2019
Energy Recovery Q4 2019 Earnings Report
Reported a net loss for Q4 2019 due to increased operating expenses and a change in product mix, despite a revenue increase.
Key Takeaways
Energy Recovery reported a net loss of $0.6 million for the fourth quarter of 2019, compared to a net income of $2.4 million in the same period of 2018. Total revenue increased by 10% to $19.5 million, driven by growth in the Water segment, while the Oil & Gas segment experienced a slight decrease. The company's product gross margin decreased due to a change in product mix, and operating expenses increased due to continued investment in research and development and growth in headcount.
Total revenue increased by 10% to $19.5 million compared to Q4 2018.
Water segment product revenue increased by 14% due to higher MPD shipments.
Oil & Gas segment revenue decreased by 3% due to no product revenue recognized.
GAAP net loss was $0.6 million, or ($0.01) per diluted share, compared to a net income of $2.4 million, or $0.04 per diluted share in Q4 2018.
Revenue by Geographic Location
Forward Guidance
The company anticipates continued growth in the water business and aims to commercialize the VorTeq system, while also focusing on long-term growth strategies.
Positive Outlook
- Optimism for the long-term health of the Water business
- Belief that SWRO is more cost effective than thermal technologies
- Belief that thermal plant owners and operators are encouraged to convert to SWRO technologies
- Belief that potential thermal to SWRO conversions represent a half-billion dollar addressable market
- Intention to continue testing the VorTeq system in preparation for commercialization, including live well testing
Challenges Ahead
- Company’s ability to achieve the milestones under the VorTeq license agreement
- Risks and uncertainties of the Company’s business
- Risks discussed under “Risk Factors” in the Company’s Form 10-K filed with the SEC
Historical Earnings Impact
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Avg. Return Before/After Earnings
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