FIRST QUARTER HIGHLIGHTS:
- Net revenue increased 34% from $4.8 million in the first quarter of 2012 to $6.4 million in the first quarter of 2013
- Gross profit margin increased from 26% in the first quarter of 2012 to 47% in the current period
- Operating expenses increased $1.6 million, or 26%, from $5.9 million in the first quarter of 2012 to $7.5 million in the first quarter of 2013
- Net loss was reduced by $0.2 million, or 4%, from $(4.7) million in the first quarter of the prior year to $(4.5) million in the current period
- Loss per share remained stable at $(0.09) from the quarter ended March 31, 2012 to the quarter ended March 31, 2013
SAN LEANDRO, Calif., May 8, 2013 (GLOBE NEWSWIRE) -- Energy Recovery, Inc. (Nasdaq:ERII), a global leader in harnessing reusable energy from industrial fluid flows and pressure cycles, announced today its unaudited financial results for the first quarter of 2013. The Company achieved net revenue of $6.4 million in the current period, representing growth of 34% compared to the same period of last year. Insofar as both periods contained no shipments for mega-projects, the revenue growth was entirely attributable to increased OEM and aftermarket sales. Of the $6.4 million in net revenue, $4.0 million, or 62%, related to PX ® energy recovery devices and related products and services, while $2.4 million, or 38%, pertained to turbochargers, pumps, and related products and services. The product mix in the first quarter of 2013 was comparable to the same period of the prior year, although a sequential comparison to the three preceding quarters demonstrates a higher percentage in the current period associated with turbochargers and pumps, which command lower gross profit margins compared to PX devices. Acknowledging normal seasonality trends that manifest from past performance, revenue in the first quarter generally represents the lowest volume in the calendar year. Similarly, the Company anticipates that mega-project shipments will commence in the second quarter of 2013, starting first with the previously announced project in Ghana, and then escalate through subsequent quarters of the year, with the fourth quarter expected to contain a significant volume of mega-project shipments. Importantly, several of these projects for which revenue is forecasted are in the final phases of negotiation and should accrue to backlog in the second quarter of 2013.
On the $1.6 million increase in net revenue, the Company recorded a gross profit margin of 47% in the first quarter of 2013 compared to 26% in the first quarter of 2012. The improvement in gross profit margin resulted primarily from positive operating leverage achieved through increased volume as well as cost savings realized through enhanced manufacturing yields and other production efficiencies. The aforementioned product mix, consisting of a heavier portion of turbochargers and pumps when compared to the previous three quarters, represented a drag on gross profit margin in the current period due to the comparatively lower gross profit margin associated with these product classes. With lighter revenue due to normal seasonality trends and the absence of mega-project activity along with a less favorable product mix, management was pleased to generate such levels of gross profit margin, believing that such profit potential implies strong performance in the ensuing quarters of the current year. Consequently, the Company expects that gross profit margins will increase sequentially throughout the year due to greater volume caused by mega-project shipments, a more favorable product mix that better favors PX devices, and the continued realization of cost savings and production efficiencies.