Investor Presentation February 2009

Transcription

1 Energy Recovery, Inc. Investor Presentation February 2009

2 Fresh Water is an Increasingly Scarce Commodity Climate change is causing widespread d drought Reservoir in Queensland, Australia April 2007 Lake Mead (Nevada) Reservoir April 2007 Reservoir in Southern Spain January 2007 The International Water Management Institute (IWMI) projects that by 2025, 33% of the world s population will live in countries with water scarcity 2

3 While Fresh Water Demand is Accelerating Rapidly growing population worldwide Growing agricultural demand (crops, livestock and biofuels) Increasing industrial demand 1000 Water Consumption Outgrowing g World Population = 100 Index: Population Water Withdrawals Source: GWI, International Desalination Association. 3

4 Municipal Water Scarce, Expensive Source: Global Water Intelligence Sept 2008 Update Paris $4.08 London $1.80 Sydney $3.87 Muscat $1.53 Berlin $3.00 Tel Aviv $1.30 San Diego $2.90 Orange County $1.22 Amsterdam ` $2.66 Doha,,Q Qatar $1.21 Perth $2.62 Singapore $1.20 Las Vegas $2.50 Cape Town $1.11 San Jose Ca $2.30 San Antonio $1.10 Dubai $2.16 Phoenix AZ $1.10 Barcelona $2.15 Los Angeles $ Melbourne $2.10 San Francisco $1.10 Houston $2.02 Malaga Spain $0.85 Tokyo $1.81 Tianjin, China $ Consumer cost per m3 (excludes var. sewage charges)

5 Sea Water Reverse Osmosis is the Solution SWRO is a sustainable and secure supply of fresh $0.70 per cubic meter Grown at 55% per year since 2002 New desalination capacity pipeline of more than 22 million m 3 /day by 2010 Lower SWRO power consumption Leads to Increased Desal Capacity years: Down 50% KWh/m years: Down 61% (1) Utilization of PX Technology (1) The Affordable Desalination Collaboration (ADC). Source: Management estimates. Source: GWI, International Desalination Association. ERI s PX device is the driving technology making this happen 5

6 ERI s Enabling Technology The PX Unit ERI s technology is 98% energy efficient Membrane High Pressure Seawater High Pressure Pump Booster Pump High Pressure Seawater Low Pressure Fresh Water Exits the Plant High Pressure Reject Stream Low Pressure Seawater Enters the Plant Low Pressure Reject Stream...Reducing energy consumption by 60% 6

7 With Unique Technology and an Elegant Design Elegant rotary design one moving part Advanced ceramics Tremendous durability No corrosion Energy efficient No scheduled maintenance Low life cycle costs Vessel Bearing Plate Ceramic Endcap Ceramic Sleeve Ceramic Endcap Locking Ring Vessel Seal Plate Ceramic Rotor Seal Area Industry Standard 8 Pressure Vessel Codeline 7

8 PX is Far Superior to Competition DWEER Double chamber complicated Seven moving gparts vs. one Metallic prone to corrosion Huge footprint 4x that of PX device PX vs. DWEER Footprint Primary competition Pelton Wheels / Hydraulic Turbochargers Maximum 80% efficiency 8

9 #1 Market Share in Early Stage of Explosive Growth ERI won 63% of the global new large plant SWRO capacity in 2007 ERI is Rapidly Becoming the Technology of Choice 2,500 Installed per Annum (>15,000) With Major Desalination Players 2,000 1,00 00 m 3 /day 1,500 1, % Heavy Industries & Construction % PX Turbine DWEER Source: GWI and management estimates. 9

10 High Barriers to Entry Durable, modular design with only one moving part Accepted industry standard, specified into majority of new plant designs 5 U.S. patents and 9 international patents with 2 additional U.S. US patents pending Endcap Endcap Rotor/Sleeve Revolutionary manufacturing gprocess with tolerance to the micron Unique industry / application know how 10

11 ERI Patent Summary These patents cover specific design features of the PX device which we believe are essential for its performance and reliability. US Patent 7,201,557 Balanced endcovers. Expires May 2, 2025 US Patent 6,540,487 Depressurization features. Expires April 10, 2021 US Patent 6,659,731 Pressurized assembly housing. Expires September 30, 2018 US Patent 5,988,993 - Hydrodynamic bearing. Expires November 28, 2015 US Patent 5,338,158 - Curved rotor. Expires August 16, new US Patent applications for next generation features International counterparts of the above 11

12 R&D Focused on New Applications and Markets Brackish PX ½ the cost of sea water PX unit Targeting brackish market PX-1200 Titan 5x more capacity than PX-220 New patentable hydraulic features Targeting mega-plants and osmotic power Comp PX Recurring service revenue Targeting lower power cost markets and solar power 12

13 PX has an Established Global Footprint PX Installations Sales Offices 13

14 Rapid Growth Across Plant Size Range Revenue Mix Increasing Announced Projects $ llions $30 Projects 100 $ in mil $20 $10 Number of 50 $ OEM Mega Aftermarket OEM Customers < 50,000 m 3 /day Americas, Asia, Europe, Middle East Sales Cycle: 1 3 months Today Total Value ~$12 million ~$495 million Mega Project Customers > 50,000 m 3 /day Asia, Australia, Europe, Middle East, N. Africa Sales Cycle: 6 18 months 14

15 ($ in million ns) $50 $45 $40 $35 $30 $25 $20 $15 $10 $5 $0 Rapid Revenue Growth Current guidance 15

16 No Debt No Debt, Low Capex, Strong Cash Position Strong Cash Flow Low capex $80 Million cash in Bank Patient Shareholders 16

17 Summary Unique pure-play on water scarcity and desalination PX reduces energy consumption by up to 60% Growing G i and diverse global l customer base High technology barriers/leading market share Rapid p growth, high margins, low capex, ample cash Strong experienced management team 17

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