Cover Page
Cover Page - shares | 3 Months Ended | |
Mar. 31, 2022 | Apr. 27, 2022 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Mar. 31, 2022 | |
Document Transition Report | false | |
Entity File Number | 001-34112 | |
Entity Registrant Name | Energy Recovery, Inc. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 01-0616867 | |
Entity Address, Address Line One | 1717 Doolittle Drive | |
Entity Address, City or Town | San Leandro | |
Entity Address, State or Province | CA | |
Entity Address, Postal Zip Code | 94577 | |
City Area Code | 510 | |
Local Phone Number | 483-7370 | |
Title of 12(b) Security | Common Stock, $0.001 par value | |
Trading Symbol | ERII | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding (in shares) | 56,562,811 | |
Entity Central Index Key | 0001421517 | |
Document Fiscal Year Focus | 2022 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Current assets: | ||
Cash and cash equivalents | $ 44,520 | $ 74,358 |
Short-term investments | 37,702 | 31,332 |
Accounts receivable, net | 26,674 | 20,615 |
Inventories, net | 23,482 | 20,383 |
Prepaid expenses and other assets | 6,594 | 5,075 |
Total current assets | 138,972 | 151,763 |
Long-term investments | 14,334 | 2,298 |
Deferred tax assets, net | 11,070 | 11,421 |
Property and equipment, net | 19,932 | 20,361 |
Operating lease, right of use asset | 14,279 | 14,653 |
Goodwill and other intangible assets | 12,824 | 12,827 |
Other assets, non-current | 365 | 367 |
Total assets | 211,776 | 213,690 |
Current liabilities: | ||
Accounts payable | 4,360 | 909 |
Accrued expenses and other liabilities | 8,093 | 13,994 |
Lease liabilities | 1,459 | 1,564 |
Contract liabilities | 2,057 | 3,318 |
Total current liabilities | 15,969 | 19,785 |
Lease liabilities, non-current | 14,615 | 14,879 |
Other liabilities, non-current | 226 | 247 |
Total liabilities | 30,810 | 34,911 |
Commitments and contingencies (Note 7) | ||
Stockholders’ equity: | ||
Common stock | 64 | 64 |
Additional paid-in capital | 198,211 | 195,593 |
Accumulated other comprehensive loss | (418) | (149) |
Treasury stock | (61,888) | (53,832) |
Retained earnings | 44,997 | 37,103 |
Total stockholders’ equity | 180,966 | 178,779 |
Total liabilities and stockholders’ equity | $ 211,776 | $ 213,690 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Income Statement [Abstract] | ||
Revenue | $ 32,546 | $ 28,940 |
Cost of revenue | 9,498 | 8,981 |
Gross profit | 23,048 | 19,959 |
Operating expenses: | ||
General and administrative | 6,551 | 6,610 |
Sales and marketing | 3,364 | 2,703 |
Research and development | 4,911 | 4,502 |
Total operating expenses | 14,826 | 13,815 |
Income from operations | 8,222 | 6,144 |
Other income (expense): | ||
Interest income | 61 | 92 |
Other non-operating income (expense), net | 56 | (10) |
Total other income, net | 117 | 82 |
Income before income taxes | 8,339 | 6,226 |
Provision for (benefit from) income taxes | 445 | (640) |
Net income | $ 7,894 | $ 6,866 |
Net income per share: | ||
Basic (in dollars per share) | $ 0.14 | $ 0.12 |
Diluted (in dollars per share) | $ 0.14 | $ 0.12 |
Number of shares used in per share calculations: | ||
Basic (in shares) | 56,783 | 56,877 |
Diluted (in shares) | 58,181 | 58,597 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Statement of Comprehensive Income [Abstract] | ||
Net income | $ 7,894 | $ 6,866 |
Other comprehensive loss, net of tax | ||
Foreign currency translation adjustments | (11) | (25) |
Unrealized loss on investments | (258) | (48) |
Total other comprehensive loss, net of tax | (269) | (73) |
Comprehensive income | $ 7,625 | $ 6,793 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) $ in Thousands | Total | Common stock | Additional paid-in capital | Accumulated other comprehensive loss | Treasury stock | Retained earnings |
Beginning balance at Dec. 31, 2020 | $ 62 | $ 179,161 | $ 53 | $ (30,486) | $ 22,834 | |
Beginning balance (in shares) at Dec. 31, 2020 | 61,798,004 | 5,455,935 | ||||
Increase (Decrease) in Stockholders' Equity | ||||||
Issuance of common stock, net | $ 1 | 6,058 | ||||
Issuance of common stock (in shares) | 1,079,563 | |||||
Stock-based compensation | 1,864 | |||||
Foreign currency translation adjustments | (25) | |||||
Unrealized loss on investments | (48) | |||||
Total other comprehensive loss, net of tax | $ (73) | (73) | ||||
Net income | 6,866 | 6,866 | ||||
Ending balance at Mar. 31, 2021 | $ 186,340 | $ 63 | 187,083 | (20) | $ (30,486) | 29,700 |
Ending balance (in shares) at Mar. 31, 2021 | 57,421,632 | 62,877,567 | 5,455,935 | |||
Beginning balance at Dec. 31, 2021 | $ 178,779 | $ 64 | 195,593 | (149) | $ (53,832) | 37,103 |
Beginning balance (in shares) at Dec. 31, 2021 | 63,544,419 | 6,721,153 | ||||
Increase (Decrease) in Stockholders' Equity | ||||||
Issuance of common stock, net | 763 | |||||
Issuance of common stock (in shares) | 294,148 | |||||
Stock-based compensation | 1,855 | |||||
Foreign currency translation adjustments | (11) | |||||
Unrealized loss on investments | (258) | |||||
Total other comprehensive loss, net of tax | (269) | (269) | ||||
Common stock repurchased | $ (8,056) | |||||
Common stock repurchased (in shares) | 415,441 | |||||
Net income | 7,894 | 7,894 | ||||
Ending balance at Mar. 31, 2022 | $ 180,966 | $ 64 | $ 198,211 | $ (418) | $ (61,888) | $ 44,997 |
Ending balance (in shares) at Mar. 31, 2022 | 56,701,973 | 63,838,567 | 7,136,594 |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Cash flows from operating activities: | ||
Net income | $ 7,894 | $ 6,866 |
Adjustments to reconcile net income to cash (used in) provided by operating activities | ||
Stock-based compensation | 1,880 | 1,913 |
Depreciation and amortization | 1,388 | 1,347 |
Amortization of premiums and discounts on investments | 288 | 71 |
Deferred income taxes | 351 | (669) |
Other non-cash adjustments | 57 | (12) |
Changes in operating assets and liabilities: | ||
Accounts receivable, net | (6,042) | (4,605) |
Contract assets | (299) | (183) |
Inventories, net | (3,123) | (186) |
Prepaid and other assets | (721) | 281 |
Accounts payable | 4,618 | 821 |
Accrued expenses and other liabilities | (6,611) | (5,182) |
Contract liabilities | (1,282) | (408) |
Net cash (used in) provided by operating activities | (1,602) | 54 |
Cash flows from investing activities: | ||
Maturities of marketable securities | 10,421 | 5,710 |
Purchases of marketable securities | (29,377) | 0 |
Capital expenditures | (1,976) | (622) |
Net cash (used in) provided by investing activities | (20,932) | 5,088 |
Cash flows from financing activities: | ||
Net proceeds from issuance of common stock | 763 | 6,059 |
Repurchase of common stock | (8,056) | 0 |
Net cash (used in) provided by financing activities | (7,293) | 6,059 |
Effect of exchange rate differences on cash, cash equivalents and restricted cash | (11) | (25) |
Net change in cash, cash equivalents and restricted cash | (29,838) | 11,176 |
Cash, cash equivalents and restricted cash, beginning of year | 74,461 | 94,358 |
Cash, cash equivalents and restricted cash, end of period | $ 44,623 | $ 105,534 |
Description of Business and Sig
Description of Business and Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2022 | |
Accounting Policies [Abstract] | |
Description of Business and Significant Accounting Policies | Description of Business and Significant Accounting Policies Energy Recovery, Inc. and its wholly-owned subsidiaries (the “Company” or “Energy Recovery”) designs and manufactures solutions that make industrial processes more efficient and sustainable. Leveraging the Company’s pressure exchanger technology, which generates little to no emissions when operating, the Company’s solutions lower costs, save energy, reduce waste and minimize emissions for companies across a variety of industrial processes. As the world coalesces around the urgent need to address climate change and its impacts, the Company is helping companies reduce their energy consumption in their industrial processes, which in turn, reduces their carbon footprint. The Company believes that its customers do not have to sacrifice quality and cost savings for sustainability and is committed to developing solutions that drive long-term value – both financial and environmental. The Company’s solutions are marketed, sold in, or developed for, the fluid-flow and gas markets, such as seawater and industrial wastewater desalination, natural gas, chemical processing and refrigeration, under the trademarks ERI ® , Ultra PX ™ , PX ® , Pressure Exchanger ® , PX Pressure Exchanger ® (“PX”), PX PowerTrain ™ , VorTeq ™ , IsoBoost ® , AT ™ , and AquaBold ™ . The Company owns, manufactures and/or develops its solutions, in whole or in part, in the United States of America (the “U.S.”). Basis of Presentation The Condensed Consolidated Financial Statements include the accounts of Energy Recovery, Inc. and its wholly-owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. The accompanying Condensed Consolidated Financial Statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). Certain information and footnote disclosures normally included in the financial statements prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) have been condensed or omitted pursuant to such rules and regulations. The December 31, 2021 Condensed Consolidated Balance Sheet was derived from audited financial statements and may not include all disclosures required by GAAP; however, the Company believes that the disclosures are adequate to make the information presented not misleading. The March 31, 2022 unaudited Condensed Consolidated Financial Statements should be read in conjunction with the audited Consolidated Financial Statements and the notes thereto for the fiscal year ended December 31, 2021 included in the Company’s Annual Report on Form 10-K filed with the SEC on February 24, 2022 (the “2021 Annual Report”). All adjustments consisting of normal recurring adjustments that are necessary to present fairly the financial position, results of operations and cash flows for the interim periods have been made. The results of operations for the interim periods are not necessarily indicative of the operating results for the full fiscal year or any future periods. Reclassifications Certain prior period amounts have been reclassified in the Condensed Consolidated Statements of Operations, Condensed Consolidated Statements of Cash Flows and certain notes to the Condensed Consolidated Financial Statements to conform to the current period presentation. Use of Estimates The preparation of Condensed Consolidated Financial Statements, in conformity with GAAP, requires the Company’s management to make judgments, assumptions and estimates that affect the amounts reported in the Condensed Consolidated Financial Statements and accompanying notes. The accounting policies that reflect the Company’s more significant estimates and judgments and that the Company believes are the most critical to aid in fully understanding and evaluating its reported financial results are revenue recognition; valuation of stock options; valuation and impairment of goodwill; inventory; deferred taxes and valuation allowances on deferred tax assets; and evaluation and measurement of contingencies. Those estimates could change, and as a result, actual results could differ materially from those estimates. In March 2020, the FASB issued ASU No. 2020-04, Reference Rate Reform (Topic 848) (“ASU 2020-04”), which provided optional expedients and exceptions for applying U.S. GAAP to contracts, hedging relationships, and other transactions affected by the discontinuation of the London Interbank Offered Rate (“LIBOR”) or by another reference rate expected to be discontinued. The FASB later issued ASU No. 2021-01, Reference Rate Reform (Topic 848): Scope, to clarify the scope of Topic 848 so that derivatives affected by the discounting transition are explicitly eligible for certain optional expedients and exceptions in Topic 848 (“ASU 2021-01”). Entities may apply the provisions of the new standards as of the beginning of the reporting period when the election is made (i.e., as early as the first quarter of 2020). Unlike other topics, the provisions of this update are only available until December 31, 2022, when the reference rate replacement activity is expected to have been completed. An entity may elect to apply amendments prospectively through December 31, 2022. The optional expedients were available to be used upon issuance of this guidance but the Company has not yet applied the guidance because the Company has not yet modified its existing contract for reference rate reform. The Company does not expect the provisions of ASU 2020-04 or ASU 2021-01 to have a material impact on its financial condition, results of operations, and cash flows. |
Revenue
Revenue | 3 Months Ended |
Mar. 31, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Revenue | Revenue Disaggregation of Revenue The following table presents the disaggregated revenues by segment, and within each segment, by product type, by primary geographical market based on the customer “shipped to” address, and by channel customers. The Company classifies its channel customers as follows: • Megaproject (“MPD”). MPD customers are major firms that develop, design, build, own and/or operate large-scale desalination plants. • Original Equipment Manufacturer (“OEM”). OEM customers are companies that supply equipment, packaged systems, and various operating and maintenance solutions for small to medium-sized desalination plants, utilized by commercial and industrial entities, as well as national, state and local municipalities worldwide. • Aftermarket (“AM”). AM customers are desalination plant owners and/or operators who can utilize our technology to upgrade or keep their plant running. Sales and usage-based taxes are excluded from revenues. See Note 9, “Segment Reporting,” for further discussion related to the Company’s segments. Three Months Ended March 31, 2022 Three Months Ended March 31, 2021 Water Emerging Technologies Total Water Emerging Technologies Total (In thousands) Product type PXs, pumps and turbo devices, and other $ 32,516 $ 30 $ 32,546 $ 28,940 $ — $ 28,940 Primary geographical market Middle East and Africa $ 22,128 $ — $ 22,128 $ 20,960 $ — $ 20,960 Asia 6,746 — 6,746 7,178 — 7,178 Americas 2,301 30 2,331 423 — 423 Europe 1,341 — 1,341 379 — 379 Total revenue $ 32,516 $ 30 $ 32,546 $ 28,940 $ — $ 28,940 Channel Megaproject $ 23,840 $ — $ 23,840 $ 23,757 $ — $ 23,757 Original equipment manufacturer 4,671 — 4,671 2,791 — 2,791 Aftermarket 4,005 30 4,035 2,392 — 2,392 Total revenue $ 32,516 $ 30 $ 32,546 $ 28,940 $ — $ 28,940 Contract Balances The following table presents contract balances by category. March 31, December 31, (In thousands) Accounts receivable, net $ 26,674 $ 20,615 Contract assets, current (included in prepaid expenses and other assets) 792 493 Contract liabilities: Contract liabilities, current $ 2,057 $ 3,318 Contract liabilities, non-current (included in other liabilities, non-current) 67 88 Total contract liabilities $ 2,124 $ 3,406 Contract Liabilities The Company records contract liabilities, which consist of customer deposits and deferred revenue, when cash payments are received in advance of the Company’s performance. The following table presents significant changes in contract liabilities during the period. March 31, December 31, (In thousands) Contract liabilities, beginning of year $ 3,406 $ 1,640 Revenue recognized (2,510) (1,415) Cash received, excluding amounts recognized as revenue during the period 1,228 3,181 Contract liabilities, end of period $ 2,124 $ 3,406 Future Performance Obligations As of March 31, 2022, the following table presents the future estimated revenue by year expected to be recognized related to performance obligations that are unsatisfied or partially unsatisfied. Year Recognized Future Performance Obligations (In thousands) 2022 (remaining nine months) $ 9,282 2023 12,860 2024 1,472 Total $ 23,614 |
Net Income Per Share
Net Income Per Share | 3 Months Ended |
Mar. 31, 2022 | |
Earnings Per Share [Abstract] | |
Net Income Per Share | Net Income Per Share Net income for the reported period is divided by the weighted average number of common shares outstanding during the reported period to calculate basic net income per common share. • Basic net income per common share excludes any dilutive effect of stock options and restricted stock units ("RSU"). • Diluted net income per common share reflects the potential dilution that would occur if outstanding stock options to purchase common stock were exercised for shares of common stock, using the treasury stock method, and if the shares of common stock underlying each unvested RSU were issued. Outstanding stock options to purchase common stock and unvested RSUs are collectively referred to as “stock awards.” The following table presents the computation of basic and diluted net income per common share. Three Months Ended March 31, 2022 2021 (In thousands, except per share amounts) Numerator Net income $ 7,894 $ 6,866 Denominator (weighted average shares) Basic common shares outstanding 56,783 56,877 Dilutive stock awards 1,398 1,720 Diluted common shares outstanding 58,181 58,597 Net income per share Basic $ 0.14 $ 0.12 Diluted $ 0.14 $ 0.12 Certain shares of common stock issuable under stock awards have been omitted from the diluted net income per common share calculations because their inclusion is considered anti-dilutive. The following table presents the weighted potential common shares issuable under stock awards that were excluded from the computation of diluted net income per common share. Three Months Ended March 31, 2022 2021 (In thousands) Anti-dilutive stock award shares 298 447 |
Other Financial Information
Other Financial Information | 3 Months Ended |
Mar. 31, 2022 | |
Other Financial Information [Abstract] | |
Other Financial Information | Other Financial Information Cash, Cash Equivalents and Restricted Cash The Condensed Consolidated Statements of Cash Flows explain the changes in the total of cash, cash equivalents and restricted cash. The following table presents a reconciliation of cash, cash equivalents and restricted cash (1) reported within the Condensed Consolidated Balance Sheets that sum to the total of such amounts presented. March 31, December 31, March 31, (In thousands) Cash and cash equivalents $ 44,520 $ 74,358 $ 105,431 Restricted cash, non-current (included in other assets, non-current) 103 103 103 Total cash, cash equivalents and restricted cash $ 44,623 $ 74,461 $ 105,534 (1) The Company pledged and deposited cash amounts into restricted cash accounts in connection with the Company’s credit cards. Accounts Receivable, net March 31, December 31, (In thousands) Accounts receivable, gross $ 26,774 $ 20,732 Allowance for doubtful accounts (100) (117) Accounts receivable, net $ 26,674 $ 20,615 Inventories, net March 31, December 31, (In thousands) Raw materials (1) $ 9,933 $ 7,352 Work in process (1) 3,352 3,406 Finished goods (1) 10,865 10,274 Inventories, gross 24,150 21,032 Valuation adjustments for excess and obsolete inventory (668) (649) Inventories, net $ 23,482 $ 20,383 (1) Inventories are stated at the lower of cost or net realizable value, using the first-in, first-out method. Prepaid Expenses and Other Assets March 31, December 31, (In thousands) Contract assets $ 792 $ 493 Cloud computing arrangement implementation costs 1,002 1,041 Supplier advances 2,700 1,717 Other prepaid expenses and other assets 2,100 1,824 Total prepaid expenses and other assets $ 6,594 $ 5,075 Goodwill and Other Intangible Assets March 31, December 31, (In thousands) Goodwill $ 12,790 $ 12,790 Other intangible assets, net 34 37 Total goodwill and other intangible assets $ 12,824 $ 12,827 Accrued Expenses and Other Liabilities March 31, December 31, (In thousands) Current Payroll, incentives and commissions payable $ 4,293 $ 10,170 Warranty reserve 914 879 Other accrued expenses and other liabilities 2,886 2,945 Total accrued expenses and other liabilities 8,093 13,994 Other liabilities, non-current 226 247 Total accrued expenses, and current and non-current other liabilities $ 8,319 $ 14,241 |
Investments and Fair Value Meas
Investments and Fair Value Measurements | 3 Months Ended |
Mar. 31, 2022 | |
Investments, Fair Value Disclosure [Abstract] | |
Investments and Fair Value Measurements | Investments and Fair Value Measurements Available-for-Sale Investments The Company’s investments in investment-grade short-term and long-term marketable debt instruments, such as corporate notes and bonds, are classified as available-for-sale. As of March 31, 2022 and 2021, available-for-sale investments were classified on the Condensed Consolidated Balance Sheets as either short-term and/or long-term investments. The classification of available-for-sale investments on the Condensed Consolidated Balance Sheets and definition of each of these classifications are provided in Note 1, “Description of Business and Significant Accounting Policies - Significant Accounting Policies,” subsections “Cash and Cash Equivalents” and “Short-term and Long-term Investments,” of the Notes to Consolidated Financial Statements included in Item 8, “Financial Statements and Supplementary Data,” in the 2021 Annual Report. Expected maturities can differ from contractual maturities because borrowers may have the right to prepay obligations without prepayment penalties. The Company generally holds available-for-sale investments until maturity; however, from time-to-time, the Company may elect to sell certain available-for-sale investments prior to contractual maturity. All of the Company’s financial assets and liabilities are remeasured and reported at fair value at each reporting period, and are classified and disclosed in one of the following three pricing category levels: Level 1 — Quoted prices (unadjusted) in active markets for identical assets or liabilities; Level 2 — Inputs other than quoted prices included within Level 1 that are either directly or indirectly observable; and Level 3 — Unobservable inputs in which little or no market activity exists, thereby requiring an entity to develop its own assumptions that market participants would use in pricing. The following table presents the Company’s financial assets measured on a recurring basis by contractual maturity, including pricing category, amortized cost, gross unrealized gains and losses, and fair value. March 31, 2022 December 31, 2021 Pricing Category Amortized Gross Gross Fair Amortized Gross Gross Fair (In thousands) Cash equivalents Money market securities Level 1 $ 27,084 $ — $ — $ 27,084 $ 50,865 $ — $ — $ 50,865 Short-term and long-term investments Corporate notes and bonds – short-term Level 2 37,873 — (171) 37,702 31,371 — (39) 31,332 Corporate notes and bonds – long-term Level 2 14,540 — (206) 14,334 2,307 — (9) 2,298 Total short and long-term investments 52,413 — (377) 52,036 33,678 — (48) 33,630 Total $ 79,497 $ — $ (377) $ 79,120 $ 84,543 $ — $ (48) $ 84,495 As of March 31, 2022 and 2021, the Company had no financial liabilities and no Level 3 financial assets. During the three months ended March 31, 2022, the Company had no transfers of financial assets between any levels. March 31, 2022 December 31, 2021 Fair Gross Fair Gross (In thousands) Corporate notes and bonds $ 52,036 $ (377) $ 33,630 $ (48) |
Lines of Credit
Lines of Credit | 3 Months Ended |
Mar. 31, 2022 | |
Debt Disclosure [Abstract] | |
Lines of Credit | Lines of Credit Credit Agreement The Company entered into a credit agreement with JPMorgan Chase Bank, N.A. (“JPMC”) on December 22, 2021 (the “Credit Agreement”). The Credit Agreement, which will expire on December 21, 2026, provides a committed revolving credit line of $50.0 million and includes both a revolving loan and a letters of credit (“LCs”) component. Under the Credit Agreement, as of March 31, 2022, there were no revolving loans outstanding. In addition, under the LCs component, the Company utilized $20.4 million of the maximum allowable credit line of $25.0 million, which includes newly issued LCs, and previously issued and unexpired stand-by letters of credits (“SBLCs”) and certain non-expired commitments under the Company’s previous Loan and Pledge Agreement with Citibank, N.A. which are guaranteed under the Credit Agreement. The following table presents the total outstanding LCs and SBLCs issued by the Company related to product warranty and performance guarantees. March 31, December 31, (In thousands) Outstanding letters of credit $ 13,124 $ 13,960 |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Warranty The following table presents the changes in the Company’s accrued product warranty reserve. Three Months Ended March 31, 2022 2021 (In thousands) Warranty reserve balance, beginning of year $ 879 $ 760 Warranty costs charged to cost of revenue 125 127 Utilization charges against reserve (5) — Release of accrual related to expired warranties (85) (76) Warranty reserve balance, end of period $ 914 $ 811 Litigation From time-to-time, the Company has been named in and subject to various proceedings and claims in connection with its business. The Company may in the future become involved in litigation in the ordinary course of business, including litigation that could be material to its business. The Company considers all claims, if any, on a quarterly basis and, based on known facts, assesses whether potential losses are considered reasonably possible, probable and estimable. Based upon this assessment, the Company then evaluates disclosure requirements and whether to accrue for such claims in its consolidated financial statements. The Company records a provision for a liability when it is both probable that a liability has been incurred and the amount of the loss can be reasonably estimated. These provisions are reviewed at least quarterly and are adjusted to reflect the impacts of negotiations, settlements, rulings, advice of legal counsel and other information and events pertaining to a particular case. As of March 31, 2022, the Company was not involved in any lawsuits and there were no material losses which were probable or reasonably possible. |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes Three Months Ended March 31, 2022 2021 (In thousands, except percentages) Provision for (benefit from) income taxes $ 445 $ (640) Discrete items 599 1,627 Provision for income taxes, excluding discrete items $ 1,044 $ 987 Effective tax rate 5.3 % (10.3 %) Effective tax rate, excluding discrete items 12.5 % 15.8 % The Company’s tax provision for interim periods is determined using an estimate of its annual effective tax rate, adjusted for discrete items, if any, that arise during the period. Each quarter, the Company updates its estimate of the annual effective tax rate, and if the estimated annual effective tax rate changes, the Company makes a cumulative adjustment in such period. The Company’s quarterly tax provision and estimate of its annual effective tax rate are subject to variation due to several factors, including variability in accurately predicting its pre-tax income or loss and the mix of jurisdictions to which they relate, intercompany transactions, the applicability of special tax regimes, and changes in how the Company does business. For the three months ended March 31, 2022, the recognized income tax expense included a benefit primarily related to the U.S. federal foreign-derived intangible income (“FDII”) and federal research and development (“R&D”) tax credit, along with a discrete tax benefit due primarily to stock-based compensation windfalls. For the three months ended March 31, 2021, the recognized income tax benefit included the U.S. federal R&D tax credit along with a discrete tax benefit due primarily to stock-based compensation windfalls. |
Segment Reporting
Segment Reporting | 3 Months Ended |
Mar. 31, 2022 | |
Segment Reporting [Abstract] | |
Segment Reporting | Segment ReportingThe Company’s chief operating decision-maker (“CODM”) is its chief executive officer. The Company continues to monitor and review its segment reporting structure in accordance with authoritative guidance to determine whether any changes have occurred that would impact its reportable segments. The following table presents a summary of the Company’s financial information by segment and corporate operating expenses. Three Months Ended March 31, 2022 Three Months Ended March 31, 2021 Water Emerging Technologies Total Water Emerging Technologies Total (In thousands) Revenue $ 32,516 $ 30 $ 32,546 $ 28,940 $ — $ 28,940 Cost of revenue 9,480 18 9,498 8,981 — 8,981 Gross profit 23,036 12 23,048 19,959 — 19,959 Operating expenses General and administrative 1,464 908 2,372 1,561 1,166 2,727 Sales and marketing 2,301 527 2,828 2,164 179 2,343 Research and development 800 4,111 4,911 501 4,001 4,502 Total operating expenses 4,565 5,546 10,111 4,226 5,346 9,572 Operating income (loss) $ 18,471 $ (5,534) 12,937 $ 15,733 $ (5,346) 10,387 Less: Corporate operating expenses 4,715 4,243 Income from operations $ 8,222 $ 6,144 |
Concentrations
Concentrations | 3 Months Ended |
Mar. 31, 2022 | |
Risks and Uncertainties [Abstract] | |
Concentrations | Concentrations Revenue The following table presents customers that account for 10% or more of the Company’s revenues. Although certain customers might account for greater than 10% of revenues at any one point in time, the concentration of revenue between a limited number of customers shifts regularly, depending on timing of shipments. The percentages by customer reflect specific relationships or contracts that would concentrate revenue for the periods presented and do not indicate a trend specific to any one customer. Three Months Ended March 31, 2022 2021 Customer A 35% ** Customer B ** 18% Customer C ** 17% Customer D ** 16% Customer E ** 15% ** Zero or less than 10%. |
Description of Business and S_2
Description of Business and Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2022 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The Condensed Consolidated Financial Statements include the accounts of Energy Recovery, Inc. and its wholly-owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. The accompanying Condensed Consolidated Financial Statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). Certain information and footnote disclosures normally included in the financial statements prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) have been condensed or omitted pursuant to such rules and regulations. The December 31, 2021 Condensed Consolidated Balance Sheet was derived from audited financial statements and may not include all disclosures required by GAAP; however, the Company believes that the disclosures are adequate to make the information presented not misleading. The March 31, 2022 unaudited Condensed Consolidated Financial Statements should be read in conjunction with the audited Consolidated Financial Statements and the notes thereto for the fiscal year ended December 31, 2021 included in the Company’s Annual Report on Form 10-K filed with the SEC on February 24, 2022 (the “2021 Annual Report”). All adjustments consisting of normal recurring adjustments that are necessary to present fairly the financial position, results of operations and cash flows for the interim periods have been made. The results of operations for the interim periods are not necessarily indicative of the operating results for the full fiscal year or any future periods. |
Reclassifications | Reclassifications Certain prior period amounts have been reclassified in the Condensed Consolidated Statements of Operations, Condensed Consolidated Statements of Cash Flows and certain notes to the Condensed Consolidated Financial Statements to conform to the current period presentation. |
Use of Estimates | Use of Estimates The preparation of Condensed Consolidated Financial Statements, in conformity with GAAP, requires the Company’s management to make judgments, assumptions and estimates that affect the amounts reported in the Condensed Consolidated Financial Statements and accompanying notes. The accounting policies that reflect the Company’s more significant estimates and judgments and that the Company believes are the most critical to aid in fully understanding and evaluating its reported financial results are revenue recognition; valuation of stock options; valuation and impairment of goodwill; inventory; deferred taxes and valuation allowances on deferred tax assets; and evaluation and measurement of contingencies. Those estimates could change, and as a result, actual results could differ materially from those estimates. |
Recently Issued Accounting Pronouncement Not Yet Adopted | Recently Issued Accounting Pronouncement Not Yet Adopted In March 2020, the FASB issued ASU No. 2020-04, Reference Rate Reform (Topic 848) (“ASU 2020-04”), which provided optional expedients and exceptions for applying U.S. GAAP to contracts, hedging relationships, and other transactions affected by the discontinuation of the London Interbank Offered Rate (“LIBOR”) or by another reference rate expected to be discontinued. The FASB later issued ASU No. 2021-01, Reference Rate Reform (Topic 848): Scope, to clarify the scope of Topic 848 so that derivatives affected by the discounting transition are explicitly eligible for certain optional expedients and exceptions in Topic 848 (“ASU 2021-01”). Entities may apply the provisions of the new standards as of the beginning of the reporting period when the election is made (i.e., as early as the first quarter of 2020). Unlike other topics, the provisions of this update are only available until December 31, 2022, when the reference rate replacement activity is expected to have been completed. An entity may elect to apply amendments prospectively through December 31, 2022. The optional expedients were available to be used upon issuance of this guidance but the Company has not yet applied the guidance because the Company has not yet modified its existing contract for reference rate reform. The Company does not expect the provisions of ASU 2020-04 or ASU 2021-01 to have a material impact on its financial condition, results of operations, and cash flows. |
Litigation | The Company considers all claims, if any, on a quarterly basis and, based on known facts, assesses whether potential losses are considered reasonably possible, probable and estimable. Based upon this assessment, the Company then evaluates disclosure requirements and whether to accrue for such claims in its consolidated financial statements. The Company records a provision for a liability when it is both probable that a liability has been incurred and the amount of the loss can be reasonably estimated. These provisions are reviewed at least quarterly and are adjusted to reflect the impacts of negotiations, settlements, rulings, advice of legal counsel and other information and events pertaining to a particular case. |
Income Taxes | The Company’s tax provision for interim periods is determined using an estimate of its annual effective tax rate, adjusted for discrete items, if any, that arise during the period. Each quarter, the Company updates its estimate of the annual effective tax rate, and if the estimated annual effective tax rate changes, the Company makes a cumulative adjustment in such period. The Company’s quarterly tax provision and estimate of its annual effective tax rate are subject to variation due to several factors, including variability in accurately predicting its pre-tax income or loss and the mix of jurisdictions to which they relate, intercompany transactions, the applicability of special tax regimes, and changes in how the Company does business. |
Revenue (Tables)
Revenue (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Disaggregation of Revenue | The following table presents the disaggregated revenues by segment, and within each segment, by product type, by primary geographical market based on the customer “shipped to” address, and by channel customers. The Company classifies its channel customers as follows: • Megaproject (“MPD”). MPD customers are major firms that develop, design, build, own and/or operate large-scale desalination plants. • Original Equipment Manufacturer (“OEM”). OEM customers are companies that supply equipment, packaged systems, and various operating and maintenance solutions for small to medium-sized desalination plants, utilized by commercial and industrial entities, as well as national, state and local municipalities worldwide. • Aftermarket (“AM”). AM customers are desalination plant owners and/or operators who can utilize our technology to upgrade or keep their plant running. Sales and usage-based taxes are excluded from revenues. See Note 9, “Segment Reporting,” for further discussion related to the Company’s segments. Three Months Ended March 31, 2022 Three Months Ended March 31, 2021 Water Emerging Technologies Total Water Emerging Technologies Total (In thousands) Product type PXs, pumps and turbo devices, and other $ 32,516 $ 30 $ 32,546 $ 28,940 $ — $ 28,940 Primary geographical market Middle East and Africa $ 22,128 $ — $ 22,128 $ 20,960 $ — $ 20,960 Asia 6,746 — 6,746 7,178 — 7,178 Americas 2,301 30 2,331 423 — 423 Europe 1,341 — 1,341 379 — 379 Total revenue $ 32,516 $ 30 $ 32,546 $ 28,940 $ — $ 28,940 Channel Megaproject $ 23,840 $ — $ 23,840 $ 23,757 $ — $ 23,757 Original equipment manufacturer 4,671 — 4,671 2,791 — 2,791 Aftermarket 4,005 30 4,035 2,392 — 2,392 Total revenue $ 32,516 $ 30 $ 32,546 $ 28,940 $ — $ 28,940 |
Contract with Customer, Asset and Liability | The following table presents contract balances by category. March 31, December 31, (In thousands) Accounts receivable, net $ 26,674 $ 20,615 Contract assets, current (included in prepaid expenses and other assets) 792 493 Contract liabilities: Contract liabilities, current $ 2,057 $ 3,318 Contract liabilities, non-current (included in other liabilities, non-current) 67 88 Total contract liabilities $ 2,124 $ 3,406 |
Contract With Customer, Contract Liability, Activity | The Company records contract liabilities, which consist of customer deposits and deferred revenue, when cash payments are received in advance of the Company’s performance. The following table presents significant changes in contract liabilities during the period. March 31, December 31, (In thousands) Contract liabilities, beginning of year $ 3,406 $ 1,640 Revenue recognized (2,510) (1,415) Cash received, excluding amounts recognized as revenue during the period 1,228 3,181 Contract liabilities, end of period $ 2,124 $ 3,406 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction | As of March 31, 2022, the following table presents the future estimated revenue by year expected to be recognized related to performance obligations that are unsatisfied or partially unsatisfied. Year Recognized Future Performance Obligations (In thousands) 2022 (remaining nine months) $ 9,282 2023 12,860 2024 1,472 Total $ 23,614 |
Net Income Per Share - (Tables)
Net Income Per Share - (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted | The following table presents the computation of basic and diluted net income per common share. Three Months Ended March 31, 2022 2021 (In thousands, except per share amounts) Numerator Net income $ 7,894 $ 6,866 Denominator (weighted average shares) Basic common shares outstanding 56,783 56,877 Dilutive stock awards 1,398 1,720 Diluted common shares outstanding 58,181 58,597 Net income per share Basic $ 0.14 $ 0.12 Diluted $ 0.14 $ 0.12 |
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share | The following table presents the weighted potential common shares issuable under stock awards that were excluded from the computation of diluted net income per common share. Three Months Ended March 31, 2022 2021 (In thousands) Anti-dilutive stock award shares 298 447 |
Other Financial Information (Ta
Other Financial Information (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Other Financial Information [Abstract] | |
Restrictions on Cash and Cash Equivalents | The following table presents a reconciliation of cash, cash equivalents and restricted cash (1) reported within the Condensed Consolidated Balance Sheets that sum to the total of such amounts presented. March 31, December 31, March 31, (In thousands) Cash and cash equivalents $ 44,520 $ 74,358 $ 105,431 Restricted cash, non-current (included in other assets, non-current) 103 103 103 Total cash, cash equivalents and restricted cash $ 44,623 $ 74,461 $ 105,534 (1) The Company pledged and deposited cash amounts into restricted cash accounts in connection with the Company’s credit cards. |
Schedule of Accounts, Notes, Loans and Financing Receivable | March 31, December 31, (In thousands) Accounts receivable, gross $ 26,774 $ 20,732 Allowance for doubtful accounts (100) (117) Accounts receivable, net $ 26,674 $ 20,615 |
Schedule of Inventories, Net | March 31, December 31, (In thousands) Raw materials (1) $ 9,933 $ 7,352 Work in process (1) 3,352 3,406 Finished goods (1) 10,865 10,274 Inventories, gross 24,150 21,032 Valuation adjustments for excess and obsolete inventory (668) (649) Inventories, net $ 23,482 $ 20,383 (1) Inventories are stated at the lower of cost or net realizable value, using the first-in, first-out method. |
Schedule of Prepaid Expenses and Other Assets | Prepaid Expenses and Other Assets March 31, December 31, (In thousands) Contract assets $ 792 $ 493 Cloud computing arrangement implementation costs 1,002 1,041 Supplier advances 2,700 1,717 Other prepaid expenses and other assets 2,100 1,824 Total prepaid expenses and other assets $ 6,594 $ 5,075 |
Schedule of Intangible Assets and Goodwill | March 31, December 31, (In thousands) Goodwill $ 12,790 $ 12,790 Other intangible assets, net 34 37 Total goodwill and other intangible assets $ 12,824 $ 12,827 |
Schedule of Accrued Liabilities | March 31, December 31, (In thousands) Current Payroll, incentives and commissions payable $ 4,293 $ 10,170 Warranty reserve 914 879 Other accrued expenses and other liabilities 2,886 2,945 Total accrued expenses and other liabilities 8,093 13,994 Other liabilities, non-current 226 247 Total accrued expenses, and current and non-current other liabilities $ 8,319 $ 14,241 |
Investments and Fair Value Me_2
Investments and Fair Value Measurements (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Investments, Fair Value Disclosure [Abstract] | |
Schedule of Amortized Cost and Fair Value of Available for Sale Securities | The following table presents the Company’s financial assets measured on a recurring basis by contractual maturity, including pricing category, amortized cost, gross unrealized gains and losses, and fair value. March 31, 2022 December 31, 2021 Pricing Category Amortized Gross Gross Fair Amortized Gross Gross Fair (In thousands) Cash equivalents Money market securities Level 1 $ 27,084 $ — $ — $ 27,084 $ 50,865 $ — $ — $ 50,865 Short-term and long-term investments Corporate notes and bonds – short-term Level 2 37,873 — (171) 37,702 31,371 — (39) 31,332 Corporate notes and bonds – long-term Level 2 14,540 — (206) 14,334 2,307 — (9) 2,298 Total short and long-term investments 52,413 — (377) 52,036 33,678 — (48) 33,630 Total $ 79,497 $ — $ (377) $ 79,120 $ 84,543 $ — $ (48) $ 84,495 |
Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value | The following table presents a summary of the fair value and gross unrealized losses on the available-for-sale securities that have been in a continuous unrealized loss position, aggregated by type of investment instrument. The available-for-sale securities that were in an unrealized gain position have been excluded from the table. March 31, 2022 December 31, 2021 Fair Gross Fair Gross (In thousands) Corporate notes and bonds $ 52,036 $ (377) $ 33,630 $ (48) |
Lines of Credit (Tables)
Lines of Credit (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Debt Disclosure [Abstract] | |
Schedule of Debt | The following table presents the total outstanding LCs and SBLCs issued by the Company related to product warranty and performance guarantees. March 31, December 31, (In thousands) Outstanding letters of credit $ 13,124 $ 13,960 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Product Warranty Liability | The following table presents the changes in the Company’s accrued product warranty reserve. Three Months Ended March 31, 2022 2021 (In thousands) Warranty reserve balance, beginning of year $ 879 $ 760 Warranty costs charged to cost of revenue 125 127 Utilization charges against reserve (5) — Release of accrual related to expired warranties (85) (76) Warranty reserve balance, end of period $ 914 $ 811 |
Income Taxes (Tables)
Income Taxes (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
Schedule of Components of Income Tax Expense (Benefit) | Three Months Ended March 31, 2022 2021 (In thousands, except percentages) Provision for (benefit from) income taxes $ 445 $ (640) Discrete items 599 1,627 Provision for income taxes, excluding discrete items $ 1,044 $ 987 Effective tax rate 5.3 % (10.3 %) Effective tax rate, excluding discrete items 12.5 % 15.8 % |
Segment Reporting (Tables)
Segment Reporting (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Segment Reporting [Abstract] | |
Reconciliation of Operating Profit (Loss) from Segments to Consolidated | The following table presents a summary of the Company’s financial information by segment and corporate operating expenses. Three Months Ended March 31, 2022 Three Months Ended March 31, 2021 Water Emerging Technologies Total Water Emerging Technologies Total (In thousands) Revenue $ 32,516 $ 30 $ 32,546 $ 28,940 $ — $ 28,940 Cost of revenue 9,480 18 9,498 8,981 — 8,981 Gross profit 23,036 12 23,048 19,959 — 19,959 Operating expenses General and administrative 1,464 908 2,372 1,561 1,166 2,727 Sales and marketing 2,301 527 2,828 2,164 179 2,343 Research and development 800 4,111 4,911 501 4,001 4,502 Total operating expenses 4,565 5,546 10,111 4,226 5,346 9,572 Operating income (loss) $ 18,471 $ (5,534) 12,937 $ 15,733 $ (5,346) 10,387 Less: Corporate operating expenses 4,715 4,243 Income from operations $ 8,222 $ 6,144 |
Concentrations (Tables)
Concentrations (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Risks and Uncertainties [Abstract] | |
Schedules of Concentration of Risk, by Risk Factor | The following table presents customers that account for 10% or more of the Company’s revenues. Although certain customers might account for greater than 10% of revenues at any one point in time, the concentration of revenue between a limited number of customers shifts regularly, depending on timing of shipments. The percentages by customer reflect specific relationships or contracts that would concentrate revenue for the periods presented and do not indicate a trend specific to any one customer. Three Months Ended March 31, 2022 2021 Customer A 35% ** Customer B ** 18% Customer C ** 17% Customer D ** 16% Customer E ** 15% ** Zero or less than 10%. |
Revenue - Disaggregation of Rev
Revenue - Disaggregation of Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Disaggregation of Revenue [Line Items] | ||
Revenue | $ 32,546 | $ 28,940 |
Water | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 32,516 | 28,940 |
Emerging Technologies | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 30 | 0 |
Middle East and Africa | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 22,128 | 20,960 |
Middle East and Africa | Water | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 22,128 | 20,960 |
Middle East and Africa | Emerging Technologies | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 0 | 0 |
Asia | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 6,746 | 7,178 |
Asia | Water | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 6,746 | 7,178 |
Asia | Emerging Technologies | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 0 | 0 |
Americas | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 2,331 | 423 |
Americas | Water | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 2,301 | 423 |
Americas | Emerging Technologies | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 30 | 0 |
Europe | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 1,341 | 379 |
Europe | Water | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 1,341 | 379 |
Europe | Emerging Technologies | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 0 | 0 |
PX Pressure Exchangers, turbochargers, pumps and other devices | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 32,546 | 28,940 |
PX Pressure Exchangers, turbochargers, pumps and other devices | Water | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 32,516 | 28,940 |
PX Pressure Exchangers, turbochargers, pumps and other devices | Emerging Technologies | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 30 | 0 |
PX Pressure Exchangers, turbochargers, pumps and other devices | Megaproject | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 23,840 | 23,757 |
PX Pressure Exchangers, turbochargers, pumps and other devices | Megaproject | Water | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 23,840 | 23,757 |
PX Pressure Exchangers, turbochargers, pumps and other devices | Megaproject | Emerging Technologies | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 0 | 0 |
PX Pressure Exchangers, turbochargers, pumps and other devices | Original equipment manufacturer | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 4,671 | 2,791 |
PX Pressure Exchangers, turbochargers, pumps and other devices | Original equipment manufacturer | Water | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 4,671 | 2,791 |
PX Pressure Exchangers, turbochargers, pumps and other devices | Original equipment manufacturer | Emerging Technologies | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 0 | 0 |
PX Pressure Exchangers, turbochargers, pumps and other devices | Aftermarket | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 4,035 | 2,392 |
PX Pressure Exchangers, turbochargers, pumps and other devices | Aftermarket | Water | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 4,005 | 2,392 |
PX Pressure Exchangers, turbochargers, pumps and other devices | Aftermarket | Emerging Technologies | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | $ 30 | $ 0 |
Revenue - Contract Assets and L
Revenue - Contract Assets and Liabilities (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 |
Revenue from Contract with Customer [Abstract] | |||
Accounts receivable, net | $ 26,674 | $ 20,615 | |
Contract assets, current (included in prepaid expenses and other assets) | 792 | 493 | |
Contract liabilities: | |||
Contract liabilities, current | 2,057 | 3,318 | |
Contract liabilities, non-current (included in other liabilities, non-current) | 67 | 88 | |
Total contract liabilities | $ 2,124 | $ 3,406 | $ 1,640 |
Revenue - Significant Changes i
Revenue - Significant Changes in Contract Liabilities (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2022 | Dec. 31, 2021 | |
Contract With Customer, Liability [Roll Forward] | ||
Contract liabilities, beginning of year | $ 3,406 | $ 1,640 |
Revenue recognized | (2,510) | (1,415) |
Cash received, excluding amounts recognized as revenue during the period | 1,228 | 3,181 |
Contract liabilities, end of period | $ 2,124 | $ 3,406 |
Revenue - Remaining Performance
Revenue - Remaining Performance Obligation (Details) $ in Thousands | Mar. 31, 2022USD ($) |
Revenue from Contract with Customer [Abstract] | |
Performance obligations expected to be satisfied | $ 23,614 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-04-01 | |
Revenue from Contract with Customer [Abstract] | |
Performance obligations expected to be satisfied | $ 9,282 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Performance obligations expected to be satisfied, expected timing | 9 months |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-01-01 | |
Revenue from Contract with Customer [Abstract] | |
Performance obligations expected to be satisfied | $ 12,860 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Performance obligations expected to be satisfied, expected timing | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-01-01 | |
Revenue from Contract with Customer [Abstract] | |
Performance obligations expected to be satisfied | $ 1,472 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Performance obligations expected to be satisfied, expected timing | 1 year |
Net Income Per Share - Computat
Net Income Per Share - Computation of Basic and Diluted Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Numerator | ||
Net income | $ 7,894 | $ 6,866 |
Denominator (weighted average shares) | ||
Basic common shares outstanding (in shares) | 56,783 | 56,877 |
Dilutive stock awards (in shares) | 1,398 | 1,720 |
Diluted common shares outstanding (in shares) | 58,181 | 58,597 |
Net income per share | ||
Basic (in dollars per share) | $ 0.14 | $ 0.12 |
Diluted (in dollars per share) | $ 0.14 | $ 0.12 |
Net Income Per Share - Antidilu
Net Income Per Share - Antidilutive Securities Excluded From Computation of Diluted Earnings Per Share (Details) - shares shares in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Earnings Per Share [Abstract] | ||
Anti-dilutive stock awards (in shares) | 298 | 447 |
Other Financial Information - C
Other Financial Information - Cash, Cash Equivalents and Restricted Cash (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 | Mar. 31, 2021 | Dec. 31, 2020 |
Other Financial Information [Abstract] | ||||
Cash and cash equivalents | $ 44,520 | $ 74,358 | $ 105,431 | |
Restricted cash, non-current (included in other assets, non-current) | 103 | 103 | 103 | |
Total cash, cash equivalents and restricted cash | $ 44,623 | $ 74,461 | $ 105,534 | $ 94,358 |
Other Financial Information - A
Other Financial Information - Accounts Receivable (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Other Financial Information [Abstract] | ||
Accounts receivable, gross | $ 26,774 | $ 20,732 |
Allowance for doubtful accounts | (100) | (117) |
Accounts receivable, net | $ 26,674 | $ 20,615 |
Other Financial Information - I
Other Financial Information - Inventories (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Other Financial Information [Abstract] | ||
Raw materials | $ 9,933 | $ 7,352 |
Work in process | 3,352 | 3,406 |
Finished goods | 10,865 | 10,274 |
Inventories, gross | 24,150 | 21,032 |
Valuation adjustments for excess and obsolete inventory | (668) | (649) |
Inventories, net | $ 23,482 | $ 20,383 |
Other Financial Information - P
Other Financial Information - Prepaid Expenses and Other Current Assets (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Other Financial Information [Abstract] | ||
Contract assets | $ 792 | $ 493 |
Cloud computing arrangement implementation costs | 1,002 | 1,041 |
Supplier advances | 2,700 | 1,717 |
Other prepaid expenses and other assets | 2,100 | 1,824 |
Total prepaid expenses and other assets | $ 6,594 | $ 5,075 |
Other Financial Information - G
Other Financial Information - Goodwill and Other Intangible Assets (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Other Financial Information [Abstract] | ||
Goodwill | $ 12,790 | $ 12,790 |
Other intangible assets, net | 34 | 37 |
Total goodwill and other intangible assets | $ 12,824 | $ 12,827 |
Other Financial Information -_2
Other Financial Information - Accrued Expenses and Other Liabilities (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 | Mar. 31, 2021 | Dec. 31, 2020 |
Current | ||||
Payroll, incentives and commissions payable | $ 4,293 | $ 10,170 | ||
Warranty reserve | 914 | 879 | $ 811 | $ 760 |
Other accrued expenses and other liabilities | 2,886 | 2,945 | ||
Total accrued expenses and other liabilities | 8,093 | 13,994 | ||
Non-current | ||||
Other liabilities, non-current | 226 | 247 | ||
Total accrued expenses, and current and non-current other liabilities | $ 8,319 | $ 14,241 |
Investments and Fair Value Me_3
Investments and Fair Value Measurements - Financial Assets Measured on Recurring Basis (Details) - USD ($) | Mar. 31, 2022 | Dec. 31, 2021 |
Debt Securities, Available-for-sale, Unrealized Gain (Loss) [Abstract] | ||
Amortized Cost | $ 79,497,000 | $ 84,543,000 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | (377,000) | (48,000) |
Fair Value | 79,120,000 | 84,495,000 |
Transfer between Level 1 and Level 2 | 0 | |
Total short and long-term investments | ||
Debt Securities, Available-for-sale, Unrealized Gain (Loss) [Abstract] | ||
Amortized Cost | 52,413,000 | 33,678,000 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | (377,000) | (48,000) |
Fair Value | 52,036,000 | 33,630,000 |
Level 1 | Cash equivalents | Money market securities | ||
Debt Securities, Available-for-sale, Unrealized Gain (Loss) [Abstract] | ||
Amortized Cost | 27,084,000 | 50,865,000 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | 0 | 0 |
Fair Value | 27,084,000 | 50,865,000 |
Level 2 | Short-term investments | Corporate notes and bonds | ||
Debt Securities, Available-for-sale, Unrealized Gain (Loss) [Abstract] | ||
Amortized Cost | 37,873,000 | 31,371,000 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | (171,000) | (39,000) |
Fair Value | 37,702,000 | 31,332,000 |
Level 2 | Long-term investments | Corporate notes and bonds | ||
Debt Securities, Available-for-sale, Unrealized Gain (Loss) [Abstract] | ||
Amortized Cost | 14,540,000 | 2,307,000 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | (206,000) | (9,000) |
Fair Value | 14,334,000 | 2,298,000 |
Measured On Recurring Basis | ||
Debt Securities, Available-for-sale, Unrealized Gain (Loss) [Abstract] | ||
Total fair value of financial liabilities | 0 | 0 |
Measured On Recurring Basis | Level 3 | ||
Debt Securities, Available-for-sale, Unrealized Gain (Loss) [Abstract] | ||
Total fair value of financial assets | $ 0 | $ 0 |
Investments and Fair Value Me_4
Investments and Fair Value Measurements - Gross Unrealized Losses and Fair Values of Investments (Details) - Corporate notes and bonds - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Debt Securities, Available-for-sale [Line Items] | ||
Fair Value | $ 52,036 | $ 33,630 |
Gross Unrealized Losses | $ (377) | $ (48) |
Lines of Credit (Details)
Lines of Credit (Details) - USD ($) | Mar. 31, 2022 | Dec. 31, 2021 | Dec. 22, 2021 |
Letter of Credit | Committed Revolving Credit Line | JP Morgan Chase Bank, N.A. | |||
Line of Credit Facility [Line Items] | |||
Maximum borrowing capacity | $ 25,000,000 | ||
Standby Letters of Credit | |||
Line of Credit Facility [Line Items] | |||
Outstanding letters of credit | 13,124,000 | $ 13,960,000 | |
Line of Credit | Committed Revolving Credit Line | JP Morgan Chase Bank, N.A. | |||
Line of Credit Facility [Line Items] | |||
Maximum borrowing capacity | $ 50,000,000 | ||
Line of Credit | Letter of Credit | Committed Revolving Credit Line | JP Morgan Chase Bank, N.A. | |||
Line of Credit Facility [Line Items] | |||
Outstanding letters of credit | 20,400,000 | ||
Line of Credit | Revolving Credit Facility | Committed Revolving Credit Line | |||
Line of Credit Facility [Line Items] | |||
Long-term debt | $ 0 |
Commitments and Contingencies -
Commitments and Contingencies - Product Warranty Liability (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Movement in Standard Product Warranty Accrual [Roll Forward] | ||
Warranty reserve balance, beginning of year | $ 879 | $ 760 |
Warranty costs charged to cost of revenue | 125 | 127 |
Utilization charges against reserve | (5) | 0 |
Release of accrual related to expired warranties | (85) | (76) |
Warranty reserve balance, end of period | $ 914 | $ 811 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Income Tax Disclosure [Abstract] | ||
Provision for (benefit from) income taxes | $ 445 | $ (640) |
Discrete items | 599 | 1,627 |
Provision for income taxes, excluding discrete items | $ 1,044 | $ 987 |
Effective tax rate | 5.30% | (10.30%) |
Effective tax rate, excluding discrete items | 12.50% | 15.80% |
Segment Reporting - Summary of
Segment Reporting - Summary of Financial Information by Segment (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Segment Reporting Information [Line Items] | ||
Revenue | $ 32,546 | $ 28,940 |
Cost of revenue | 9,498 | 8,981 |
Gross profit | 23,048 | 19,959 |
Operating expenses: | ||
General and administrative | 6,551 | 6,610 |
Sales and marketing | 3,364 | 2,703 |
Research and development | 4,911 | 4,502 |
Total operating expenses | 14,826 | 13,815 |
Income from operations | 8,222 | 6,144 |
Water | ||
Segment Reporting Information [Line Items] | ||
Revenue | 32,516 | 28,940 |
Emerging Technologies | ||
Segment Reporting Information [Line Items] | ||
Revenue | 30 | 0 |
Operating Segments | ||
Segment Reporting Information [Line Items] | ||
Revenue | 32,546 | 28,940 |
Cost of revenue | 9,498 | 8,981 |
Gross profit | 23,048 | 19,959 |
Operating expenses: | ||
General and administrative | 2,372 | 2,727 |
Sales and marketing | 2,828 | 2,343 |
Research and development | 4,911 | 4,502 |
Total operating expenses | 10,111 | 9,572 |
Income from operations | 12,937 | 10,387 |
Operating Segments | Water | ||
Segment Reporting Information [Line Items] | ||
Revenue | 32,516 | 28,940 |
Cost of revenue | 9,480 | 8,981 |
Gross profit | 23,036 | 19,959 |
Operating expenses: | ||
General and administrative | 1,464 | 1,561 |
Sales and marketing | 2,301 | 2,164 |
Research and development | 800 | 501 |
Total operating expenses | 4,565 | 4,226 |
Income from operations | 18,471 | 15,733 |
Operating Segments | Emerging Technologies | ||
Segment Reporting Information [Line Items] | ||
Revenue | 30 | 0 |
Cost of revenue | 18 | 0 |
Gross profit | 12 | 0 |
Operating expenses: | ||
General and administrative | 908 | 1,166 |
Sales and marketing | 527 | 179 |
Research and development | 4,111 | 4,001 |
Total operating expenses | 5,546 | 5,346 |
Income from operations | (5,534) | (5,346) |
Corporate | ||
Operating expenses: | ||
Total operating expenses | $ 4,715 | $ 4,243 |
Concentrations (Details)
Concentrations (Details) - Water - Revenue from Contract with Customer Benchmark - Customer Concentration Risk | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Customer A | ||
Concentration Risk [Line Items] | ||
Percentage of product revenue | 35.00% | |
Customer B | ||
Concentration Risk [Line Items] | ||
Percentage of product revenue | 18.00% | |
Customer C | ||
Concentration Risk [Line Items] | ||
Percentage of product revenue | 17.00% | |
Customer D | ||
Concentration Risk [Line Items] | ||
Percentage of product revenue | 16.00% | |
Customer E | ||
Concentration Risk [Line Items] | ||
Percentage of product revenue | 15.00% |