Energy Recovery Inc Consolidates North American Operations
July 13 2011 - 4:30AM
Business Wire
Energy Recovery Inc (NASDAQ:ERII), a leader in the design and
development of energy recovery devices for desalination and other
industrial processes, today announced the planned consolidation of
its North American manufacturing operations. Under the plan, the
company will move its operations in Michigan, where its pumps and
turbocharges are currently assembled, and relocate those activities
to its existing headquarters and production center in San Leandro,
California. ERI expects the consolidation to significantly reduce
costs, improve efficiencies and enhance research and development
efforts, positioning the company to experience increased
profitability in subsequent years.
To implement this consolidation, the company expects to record
non-recurring expenses in the current year of approximately $4.7
million—which includes a loss on sale of $1.3 million, moving costs
of $0.4 million, and employee severance and other estimated
transition costs of approximately $1.8 million. ERI anticipates
that the consolidation will generate recurring cost savings in
subsequent years on the order of $3.0 million, resulting mainly
from reductions in headcount and other overhead expenses. ERI
expects the impact of the consolidation on cash flow to be
minimal.
Beyond cost savings, this initiative allows the company to
streamline and accelerate its research and development plans and
achieve enhanced focus on bringing new products to market. “While
we regret the impact of the plan on our Michigan employees,
consolidation is the right decision for our shareholders and
customers,” said Thomas S. Rooney, chief executive officer of ERI.
“This is a great opportunity for the company to streamline its
manufacturing operations, reduce production costs and improve its
financial performance. In keeping with our corporate strategy to
diversify into new strategic market segments of large addressable
size, the consolidation will also allow us to accelerate the launch
of next-generation products.”
About Energy Recovery Inc
Energy Recovery Inc (NASDAQ:ERII) designs and develops energy
recovery devices that significantly reduce energy consumption in
desalination and other industrial processes. Energy Recovery’s
prominence in the desalination market includes notable technologies
such as the PX Pressure Exchanger™ (PX™) devices, the ERI™
TurboCharger hydraulic turbine energy recovery devices and the ERI™
AquaBold™ and ERI™ AquaSpire™ high-pressure pumps. In total, Energy
Recovery has more than 12,000 devices installed, reducing the
carbon footprint of desalination by saving 1 GW of energy and
offsetting CO2 emissions by more than 5.2 million tons per year.
The company is headquartered in the San Francisco Bay Area with
offices in key centers worldwide, including Madrid, Shanghai, and
the United Arab Emirates. For more information about Energy
Recovery Inc, please visit www.energyrecovery.com.
This press release includes “forward-looking statements” within
the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as
amended. These forward-looking statements include our expectation
that the consolidation of our Michigan and California operations
will reduce costs, improve efficiencies, enhance research and
development efforts and help accelerate the Company’s
diversification into new markets. Because such forward-looking
statements involve risks and uncertainties, the Company's actual
results may differ materially from the predictions in those
forward-looking statements. Factors that could cause actual results
to differ materially include, but are not limited to, unexpected
costs or delays in the consolidation, our inability to maintain
product quality and timely fulfill orders during the transition,
higher outsourcing costs than expected, loss of key employees or
the failure of the consolidation to yield expected cost reductions,
economies of scale or expected synergies, and other risks detailed
in the Company's filings with the Securities and Exchange
Commission (“SEC”). All forward-looking statements are made as of
today, and the Company assumes no obligation to update such
statements. For more details relating to the risks and
uncertainties that could cause actual results to differ materially
from those anticipated in our forward-looking statements, please
refer to the Company's SEC filings.
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