Energy Recovery, Inc. · NASDAQ:ERII
Energy Recovery — Investor Presentation (March 2017)
26 slides from Energy Recovery's investor presentation, Mar 22, 2017
Slide 1: ERI Investor Presentation 2017
ERI INVESTOR PRESENTATION (NASDAQ; ERII) 2017 energy recovery) 4
Slide 2: Forward Looking Statements
FORWARD LOOKING STATEMEN This presentation contains forward-looking statements within the “Safe Harbor” provisions of the Private Securities Reform Act of 1995. Forward-looking statements in this report include, but are not limited to, statements about our expectations, objectives, anticipations, pl
Slide 3: Energy Recovery Snapshot
ENERGY RECOVERY SNAPSHOT, MAA, \ Who We Are An energy solutions provider and technology leader in applying fluid dynamics and advanced materials science What We Do Create markets to preserve or eliminate pumps that are subject to and destroyed by hostile process fluids Convert wasted pressure energy
Slide 4: Recent corporate milestones 2014-2016
Developed x 50 New Corporate Commenced Pressure ie Strategy and collaborative Exchanger Management VorTeq testing Technology Team with Schlumberger Xy Invested in R&D lags Signed 15-year g Secured largest license with e A purchase order in Established Schlumberger company history Market Leadership i
Slide 5: Growth, Perpetual Innovation, Financial Strength
Growth = Commercialize VorTeq Technology = Further penetration of Saudi Aramco production portfolio * New productintroduction and early stage partner in 2017 Perpetual Innovation = Pressure exchanger technology, adaptable to other industries = Target-rich product development road map * World-class e
Slide 6: Core Technology — The Pressure Exchanger
CORE TECHNOLOGY — THE PRESSURE EXCHANGER’ Sleeve L Rotor with ducts a (only moving part) f nt > Pressure Exchange in Motion NIGH PRESSURE, © energy recovery” Page 6
Slide 7: Product Portfolio
PRODUCT PORTFOLIO WATER : OIL & GAS CHEMICALS g Making Desalination Affordable i 2 = “1 Pressure Exchanger 2 ; ; Hydraulic Fracturing: VorTeq i Cx po >, R IsoBoost Applications, "= Gas Processing = Ammonia Le S IsoGen Applications J r = Gas Processing = Pipelines 7 = Ammonia 17,000 Installations on
Slide 8: Ubiquitous Technology with Significant Revenue Opportunity
UBIQUITOUS TE OLOGY WITH SIGNIFICANT Continue to invest in R&D © 27.5% of OPEX in 2014 © 20.2% of OPEX in 2015 Pressure Exchanger: SLB Licensing Revenue Desal 2015 S45M Incremental Revenue Opportuni $?7M } Develop derivatives of Pressure } Exchanger Technology every 24 * 27.8% of OPEXin 2016, Deriva
Slide 9: New Product and Market Development
NEW PRODUCT AND MARKET DEVELOPMENT, High rates of flow @ High pressure differentials be High capital intensity in the form of pumps E03 and ancillary ——- equipment Hostile process fluid applications Flowx Pressure Differential = Energy Density © energy recovery Page 9 4) 4) 4] 4%
Slide 10: Efficient Frontier of Product Optionality
EFFICIENT FRONTIER OF P) Return DUCT OPTIONALITY Desalination Early-stage Businesses / Real Options $15 -$20MFCFE VorTeq™ ~ 2015, exclusive licensing agreement with SLB Cash Cow/ Funding Mechanism = me =o > PX /VorTeq derivatives target rich product development roadmap IsoGen™—2015, installed firstE
Slide 11: Go To Market Strategy
GO TO MARKET STRATEG Targeting 24 month development cycles, commencing every twelve months Next concept cycle begins a Consummate Derive Prototype long-term Manufacture value designand | strategic commercial Concept proposition manufacturing | partnership units Sizeand Consummate Initiate Conclude G
Slide 12: ~$4B Near-Term Addressable Market Opportunity
Slide 13: Desalination
Slide 14: Desalination — Our First Disruptive Technology
DESALINATION — OUR FIRST DISRUPTIVE TECHNOLOGY The “PX Pressure Exchanger” = 17,000 PX Devices Installed Worldwide = 25-year Life with No Maintenance = Dominant Global Market Share = 60%+ Gross Margins Compelling Short and Long Term Market Opportunity = Global Water Demand / Supply Gap = Expand Prod
Slide 15: Emerging Markets: Energy
Slide 16: VorTeq Hydraulic Pumping System
VORTEQ HYDRAULIC PUMPING SYSTEM Hydraulic Piston Concept Fluid Flows in Pressure Exchanger ok ca = cata *5 bri: 3 en energy recovery Page 16
Slide 17: VorTeq Integration
VORTEQ INTEGRATION Go © energy recovery” ‘STRICTLY PRIVATE AND CONFIDENTIAL With VorTeq Page 17
Slide 18: Is VorTeq Disruptive?
IS VORTEQ DISRUPTIVE? With VorTeq Centrifugal Pump Model ing Pumping Model with 15 to 20 PD Pumps New Pumping Model with3 to 4 Centrifugal Pumps oe Reduced Maintenance: $3M to $4M p/yr p/fleet* Centrifugal Pump Model $8M to $12M p/yr p/fleet* e Decreased Pump Redundancy / Lower CAPEX: $1M to $2M p/y
Slide 19: SLB Licensing Agreement Structure
SLB LICENSING AGREEMENT STRUCTURE o Agreement provides exclusive rights to ERI’s Vorteq™ Hydraulic Pumping System for on-shore hydraulic fracturing (Field of Use) = Commercializes the VorTeq™ technology with one of the industry’s most respected oil-field services companies o Highlights = Schlumberge
Slide 20: Emerging Markets: Gas Processing, Ammonia, Pipelines
~. AN b-~ Emerging lv wy » Gas Processinggam monia, Pipeliftes
Slide 21: Our Solution — Gas Processing and Ammonia
OUR SOLUTION — GAS PROCESSING AND AMMONIA IsoBoost recovers pressure energy and increases reliability of pumping systems Save Millions of Dollars in Energy over life of plant Improve Reliability, Availability, Maintainability Decrease Carbon Footprint Helps plants save energy, reduce maintenance, \
Slide 22: Our Solution — Gas Processing and Ammonia
R SOLUTION — GAS PROCESSING AND AMMONIA ‘SWEET GAS LEAN AMINE CCONTACTOR >) HIGH HIGH HIGH | sour cas PRESSURE PRESSURE pressure sous PUMP puMP | PUMP RICH AMINE re el a nee REGENERATOR VALVE EXCHANGER "FROM REGENERATOR Wasted Pressure Energy & High Pump CAPEX © energy recovery” With IsoBoost SWEET
Slide 23: Our Solution - Pipelines
OUR SOLUTION - PIPELINES oh all Pumping station Terminal or refinery Vertical Pipelines Must Be Depressurized © energy recovery” With IsoBoost ch - Pumping station Pressure Generating Power Page 23
Slide 24: Strategic Imperatives
_ Strategic Imperatives - energy recovery”
Slide 25: Strategic Imperatives
STRATEGIC IMPERATIVES Commercialize VorTeq = On schedule to achieve Milestone | and Il in 2017 = Deployment estimated to commence in 2018 Product Innovation = Innovate and achieve proof of concept of new products that are derivatives of Pressure Exchanger Technology every 24 months, in annual cycles
Slide 26: Thank You
THANK YOU energy recovery) 4