ENERGY RECOVERY, INC. (ERII) filed Quarterly Report for the period ended 2009-09-30.
Based in San Leandro California ENERGY RECOVERY INC. is a leading global developer and manufacturer of highly efficient energy recovery devices utilized in the water desalination industry. Energy Recovery Inc. operates primarily in the sea water reverse osmosis segment of the desalination industry.ERI manufactures ultra-high efficiency recovery products and technology specifically the ERI PX Pressure Exchanger that are among the enabling technologies driving the rapid growth in seawater reverse osmosis desalination and are helping to make desalination affordable worldwide. Energy Recovery, Inc. has a market cap of $299.4 million; its shares were traded at around $5.97 with a P/E ratio of 42.6 and P/S ratio of 5.6.
Highlight of Business Operations:
General and administrative expense increased by $347,000, or 13%, to $3.0 million for the three months ended September 30, 2009 from $2.7 million for the three months ended September 30, 2008. As a percentage of net revenue, general and administrative expense was 31.9% for the three months ended September 30, 2009 and 29.8% for the three months ended September 30, 2008. The increase of general and administrative expense was attributable primarily to the increase in general and administrative headcount and professional services to support our growth in operations and to support the requirements for operating as a public company. General and administrative average headcount increased to 36 for the third quarter of 2009 from 27 for the third quarter of 2008.
Of the $347,000 increase in general and administrative expense, increases of $379,000 related to compensation and employee-related benefits, $241,000 related to professional services and $48,000 related to occupancy and other administrative costs were offset in part by a decrease of $272,000 related to bad debt expense and $49,000 related to Value Added Taxes (VAT). Stock-based compensation expense included in general and administrative expense was $486,000 for the three months ended September 30, 2009 and $149,000 for the three months ended September 30, 2008.
Of the $167,000 net increase in sales and marketing expense for the three months ended September 30, 2009, $227,000 related to compensation, employee-related benefits and commissions to outside sales representatives and $16,000 related to occupancy and other administrative costs. The increases were partially offset by a decrease of $76,000 related to other sales and marketing costs. Stock-based compensation expense included in sales and marketing expense was $253,000 for the three months ended September 30, 2009 and $122,000 for the three months ended September 30, 2008.
Research and development expense increased by $101,000, or 15%, to $779,000 for the three months ended September 30, 2009 from $678,000 for the three months ended September 30, 2008. This increase was primarily attributable to recent efforts to develop and strengthen our expertise in ceramics material science.
Of the $101,000 increase, increases of $122,000 related to compensation and employee-related benefits and $49,000 related to occupancy and other miscellaneous costs were partially offset by decreases of $39,000 related to research and development direct project costs and $31,000 related to consulting and professional service.
Other income, net, decreased $180,000 to $20,000 for the three months ended September 30, 2009 from $200,000 for the three months ended September 30, 2008. The decrease was primarily due to a decrease in interest income of $402,000 as a result of lower
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