Energy Recovery, Inc. [ERII] Filings

10-Q 1 erii-20240630.htm FORM 10-Q - Q2'2024 erii-20240630

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

☑QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2024

☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ____________ to __________

Commission File Number: 001-34112

Energy Recovery, Inc.

(Exact Name of Registrant as Specified in its Charter)


	Delaware		01-0616867
	(State or Other Jurisdiction of Incorporation)		(I.R.S. Employer Identification No.)

1717 Doolittle Drive, San Leandro, California 94577

(Address of Principal Executive Offices) (Zip Code)

(510) 483-7370

(Registrant’s Telephone Number, Including Area Code)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol	Name of each exchange on which registered
Common Stock, $0.001 par value	ERII	The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934

during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing

requirements for the past 90 days. Yes þ No ¨

Indicate by check mark whether the registrant has submitted electronically, every Interactive Data File required to be submitted pursuant to Rule 405 of

Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such

files). Yes þ No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an

emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in

Rule 12b-2 of the Exchange Act.

Large accelerated filer ☑Accelerated filer ☐Non-accelerated filer ☐Smaller reporting company ☐Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or

revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

Indicate by check mark whether the registrant is a shell company (as defined in Exchange Act Rule 12b-2). Yes ☐ No ☑

As of July 25, 2024, there were 57,724,968 shares of the registrant’s common stock outstanding.

ENERGY RECOVERY, INC.

TABLE OF CONTENTS


		Page No.
PART I
FINANCIAL INFORMATION
Item 1	Financial Statements (Unaudited)
	Condensed Consolidated Balance Sheets — June 30, 2024 and December 31, 2023	1
	Condensed Consolidated Statements of Operations — Three and Six Months Ended June 30, 2024 and 2023	2
	Condensed Consolidated Statements of Comprehensive Loss — Three and Six Months Ended June 30, 2024 and 2023	3
	Condensed Consolidated Statements of Stockholders’ Equity — Three and Six Months Ended June 30, 2024 and 2023	4
	Condensed Consolidated Statements of Cash Flows — Six Months Ended June 30, 2024 and 2023	5
	Notes to Condensed Consolidated Financial Statements	6

Item 2	Management’s Discussion and Analysis of Financial Condition and Results of Operations	19
Item 3	Quantitative and Qualitative Disclosures About Market Risk	27
Item 4	Controls and Procedures	28

PART II
OTHER INFORMATION
Item 1	Legal Proceedings	28
Item 1A	Risk Factors	28
Item 2	Unregistered Sales of Equity Securities and Use of Proceeds	28
Item 3	Defaults Upon Senior Securities	28
Item 4	Mine Safety Disclosures	28
Item 5	Other Information	29
Item 6	Exhibits	29

Signatures		29

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Energy Recovery, Inc. | Q2'2024 Form 10-Q

Forward-Looking Information

This Quarterly Report on Form 10-Q for the three and six months ended June 30, 2024, including Part I, Item 2, “Management’s

Discussion and Analysis of Financial Condition and Results of Operations” (the “MD&A”), contains forward-looking statements within the “safe

harbor” provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements in this report include, but are not

limited to, statements about our expectations, objectives, anticipations, plans, hopes, beliefs, intentions or strategies regarding the future.

Forward-looking statements represent our current expectations about future events, are based on assumptions, and involve risks and

uncertainties. If the risks or uncertainties occur or the assumptions prove incorrect, then our results may differ materially from those set forth

or implied by the forward-looking statements. Our forward-looking statements are not guarantees of future performance or events.

Words such as “expects,” “anticipates,” “aims,” “projects,” “intends,” “plans,” “believes,” “estimates,” “seeks,” “continue,” “could,”

“may,” “potential,” “should,” “will,” “would,” variations of such words and similar expressions are also intended to identify such forward-looking

statements. These forward-looking statements are subject to risks, uncertainties and assumptions that are difficult to predict; therefore,

actual results may differ materially and adversely from those expressed in any forward-looking statement. Readers are directed to risks and

uncertainties identified under Part II, Item 1A, “Risk Factors,” and elsewhere in this report for factors that may cause actual results to be

different from those expressed in these forward-looking statements. Except as required by law, we undertake no obligation to revise or

update publicly any forward-looking statement for any reason.

Forward-looking statements in this report include, without limitation, statements about the following:

•our belief that our PX offers market-leading value with the highest technological and economic benefit;

•our belief that leveraging our pressure exchanger technology will unlock new commercial opportunities in the future;

•our belief that our PX G1300™ can contribute to help make CO2-based refrigeration economically viable in a broader range of

climates;

•our belief that our technology helps our customer achieve environmentally sustainable operations;

•our expectation that sales outside of the U.S. will remain a significant portion of our revenue;

•the scale of the environmental impact from the use of our solutions;

•our belief that our sustainability goals are highly influential to our business success;

•the timing of our receipt of payment for products or services from our customers;

•our belief that our existing cash and cash equivalents, our short and/or long-term investments, and the ongoing cash generated

from our operations, will be sufficient to meet our anticipated liquidity needs for the foreseeable future, with the exception of a

decision to enter into an acquisition and/or fund investments in our latest technology arising from rapid market adoption that

could require us to seek additional equity or debt financing;

•our expectations relating to the amount and timing of recognized revenue from our projects;

•our expectations relating to expenses;

•our expectation that we will continue to receive a tax benefit related to U.S. federal foreign-derived intangible income and

research and development tax credit;

•the outcome of proceedings, lawsuits, disputes and claims;

•the impact of losses due to indemnification obligations;

•other factors disclosed under the MD&A and Part I, Item 3, “Quantitative and Qualitative Disclosures about Market Risk,” and

elsewhere in this Form 10-Q.

You should not place undue reliance on these forward-looking statements. These forward-looking statements reflect management’s

opinions only as of the date of the filing of this Quarterly Report on Form 10-Q. All forward-looking statements included in this document are

subject to additional risks and uncertainties further discussed under Part II, Item 1A, “Risk Factors,” and are based on information available to

us as of July 31, 2024. We assume no obligation to update any such forward-looking statements. Certain risks and uncertainties could

cause actual results to differ materially from those projected in the forward-looking statements. These forward-looking statements are

disclosed from time to time in our Annual Reports on Form 10‑K, Quarterly Reports on Form 10‑Q and Current Reports on Form 8‑K filed

with, or furnished to, the Securities and Exchange Commission (the “SEC”), as well as in Part II, Item 1A, “Risk Factors,” within this Quarterly

Report on Form 10-Q.

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Energy Recovery, Inc. | Q2'2024 Form 10-Q | FLS 1

It is important to note that our actual results could differ materially from the results set forth or implied by our forward-looking

statements. The factors that could cause our actual results to differ from those included in such forward-looking statements are set forth

under the heading Item 1A, “Risk Factors,” in our Quarterly Reports on Form 10-Q, in our Annual Reports on Form 10-K, and from time-to-

time, in our results disclosed in our Current Reports on Form 8-K. In addition, when preparing the MD&A below, we presume the readers

have access to and have read the MD&A in our Annual Report on Form 10-K, pursuant to Instruction 2 to paragraph (b) of Item 303 of

Regulation S-K.

We provide our Annual Reports on Form 10‑K, Quarterly Reports on Form 10‑Q, Current Reports on Form 8‑K, Proxy Statements on

Schedule 14A, Forms 3, 4 and 5 filed by, or on behalf of, directors, executive officers and certain large shareholders, and any amendments to

those documents filed or furnished pursuant to the Securities Exchange Act of 1934, free of charge on the Investor Relations section of our

website, www.energyrecovery.com. These filings will become available as soon as reasonably practicable after such material is

electronically filed with or furnished to the SEC. From time to time, we may use our website as a channel of distribution of material company

information.

We also make available in the Investor Relations section of our website our corporate governance documents including our code of

business conduct and ethics and the charters of the audit, compensation and nominating and governance committees. These documents, as

well as the information on the website, are not intended to be part of this Quarterly Report on Form 10-Q. We use the Investor Relations

section of our website as a means of complying with our disclosure obligations under Regulation FD. Accordingly, you should monitor the

Investor Relations section of our website in addition to following our press releases, SEC filings and public conference calls and webcasts.

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Energy Recovery, Inc. | Q2'2024 Form 10-Q | FLS 2

PART I — FINANCIAL INFORMATION

Item 1 — Financial Statements (unaudited)

ENERGY RECOVERY, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS


	June 30, 2024	December 31, 2023
	(In thousands)
ASSETS
Current assets:
Cash and cash equivalents	$40,313	$68,098
Short-term investments	60,697	40,445
Accounts receivable, net	20,670	46,937
Inventories, net	33,659	26,149
Prepaid expenses and other assets	3,690	3,843
Total current assets	159,029	185,472
Long-term investments	37,017	13,832
Deferred tax assets, net	11,441	10,324
Property and equipment, net	17,248	18,699
Operating lease, right of use asset	10,599	11,469
Goodwill	12,790	12,790
Other assets, non-current	919	388
Total assets	$249,043	$252,974
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$4,753	$3,000
Accrued expenses and other liabilities	10,153	15,583
Lease liabilities	1,909	1,791
Contract liabilities	3,214	1,097
Total current liabilities	20,029	21,471
Lease liabilities, non-current	10,415	11,488
Other liabilities, non-current	86	207
Total liabilities	30,530	33,166
Commitments and contingencies (Note 7)
Stockholders’ equity:
Common stock	66	65
Additional paid-in capital	225,240	217,617
Accumulated other comprehensive loss	(61)	(44)
Treasury stock	(80,486)	(80,486)
Retained earnings	73,754	82,656
Total stockholders’ equity	218,513	219,808
Total liabilities and stockholders’ equity	$249,043	$252,974

See Accompanying Notes to Condensed Consolidated Financial Statements

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Energy Recovery, Inc. | Q2'2024 Form 10-Q | 1

ENERGY RECOVERY, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS


	Three Months Ended June 30,		Six Months Ended June 30,
	2024	2023	2024	2023
	(In thousands, except per share data)
Revenue	$27,199	$20,723	$39,289	$34,124
Cost of revenue	9,633	7,180	14,588	12,426
Gross profit	17,566	13,543	24,701	21,698

Operating expenses:
General and administrative	9,532	7,269	17,098	14,335
Sales and marketing	6,104	5,092	12,256	9,986
Research and development	3,944	3,768	8,295	8,074
Total operating expenses	19,580	16,129	37,649	32,395
Loss from operations	(2,014)	(2,586)	(12,948)	(10,697)

Other income (expense):
Interest income	1,663	782	3,105	1,403
Other non-operating expense, net	(49)	(126)	(102)	(91)
Total other income, net	1,614	656	3,003	1,312
Loss before income taxes	(400)	(1,930)	(9,945)	(9,385)
Provision for (benefit from) income taxes	242	(265)	(1,043)	(1,424)
Net loss	$(642)	$(1,665)	$(8,902)	$(7,961)

Net loss per share:
Basic	$ (0.01)	$ (0.03)	$ (0.16)	$ (0.14)
Diluted	$ (0.01)	$ (0.03)	$ (0.16)	$ (0.14)

Number of shares used in per share calculations:
Basic and diluted	57,366	56,363	57,234	56,296

See Accompanying Notes to Condensed Consolidated Financial Statements

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Energy Recovery, Inc. | Q2'2024 Form 10-Q | 2

ENERGY RECOVERY, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS


	Three Months Ended June 30,		Six Months Ended June 30,
	2024	2023	2024	2023
	(In thousands)
Net loss	$(642)	$(1,665)	$(8,902)	$(7,961)
Other comprehensive income (loss), net of tax
Foreign currency translation adjustments	9	114	37	97
Unrealized gain (loss) on investments	(10)	30	(54)	125
Total other comprehensive income (loss), net of tax	(1)	144	(17)	222
Comprehensive loss	$(643)	$(1,521)	$(8,919)	$(7,739)

See Accompanying Notes to Condensed Consolidated Financial Statements

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Energy Recovery, Inc. | Q2'2024 Form 10-Q | 3

ENERGY RECOVERY, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY


	Three Months Ended June 30,		Six Months Ended June 30,
	2024	2023	2024	2023
	(In thousands, except shares)
Common stock
Beginning balance	$65	$64	$65	$64
Issuance of common stock, net	1	1	1	1
Ending balance	66	65	66	65

Additional paid-in capital
Beginning balance	222,122	207,340	217,617	204,957
Issuance of common stock, net	311	213	1,501	378
Stock-based compensation	2,807	1,586	6,122	3,804
Ending balance	225,240	209,139	225,240	209,139

Accumulated other comprehensive loss
Beginning balance	(60)	(271)	(44)	(349)
Other comprehensive (loss) income
Foreign currency translation adjustments	9	114	37	97
Unrealized (loss) gain on investments	(10)	30	(54)	125
Total other comprehensive (loss) income, net	(1)	144	(17)	222
Ending balance	(61)	(127)	(61)	(127)

Treasury stock
Beginning and ending balance	(80,486)	(80,486)	(80,486)	(80,486)

Retained earnings
Beginning balance	74,396	54,856	82,656	61,152
Net loss	(642)	(1,665)	(8,902)	(7,961)
Ending balance	73,754	53,191	73,754	53,191

Total stockholders’ equity	$218,513	$181,782	$218,513	$181,782

Common stock issued (shares)
Beginning balance	65,477,914	64,491,384	65,029,459	64,225,391
Issuance of common stock, net	93,361	62,585	541,816	328,578
Ending balance	65,571,275	64,553,969	65,571,275	64,553,969

Treasury stock (shares)
Beginning and ending balance	8,148,512	8,148,512	8,148,512	8,148,512

Total common stock outstanding (shares)	57,422,763	56,405,457	57,422,763	56,405,457

See Accompanying Notes to Condensed Consolidated Financial Statements

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Energy Recovery, Inc. | Q2'2024 Form 10-Q | 4

ENERGY RECOVERY, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS


	Six Months Ended June 30,
	2024	2023
(In thousands)
Cash flows from operating activities:
Net loss	$(8,902)	$(7,961)
Adjustments to reconcile net loss to cash provided by (used in) operating activities
Stock-based compensation	6,100	4,020
Depreciation and amortization	2,041	2,019
Right of use asset amortization	870	808
Accretion (amortization) of discounts (premiums) on investments	(596)	(383)
Deferred income taxes	(1,117)	(1,409)
Other non-cash adjustments	288	149
Changes in operating assets and liabilities:
Accounts receivable, net	26,235	18,732
Contract assets	64	1,355
Inventories, net	(7,880)	(8,097)
Prepaid and other assets	(568)	(267)
Accounts payable	2,278	804
Accrued expenses and other liabilities	(6,270)	(5,266)
Contract liabilities	2,027	19
Net cash provided by operating activities	14,570	4,523

Cash flows from investing activities:
Sales of marketable securities	—	2,966
Maturities of marketable securities	30,385	29,950
Purchases of marketable securities	(73,280)	(49,185)
Capital expenditures	(1,025)	(849)
Proceeds from sales of fixed assets	90	82
Net cash used in investing activities	(43,830)	(17,036)

Cash flows from financing activities:
Net proceeds from issuance of common stock	1,502	379
Net cash provided by financing activities	1,502	379

Effect of exchange rate differences on cash and cash equivalents	(24)	41
Net change in cash, cash equivalents and restricted cash	(27,782)	(12,093)
Cash, cash equivalents and restricted cash, beginning of year	68,225	56,458
Cash, cash equivalents and restricted cash, end of period	$40,443	$44,365

See Accompanying Notes to Condensed Consolidated Financial Statements

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Energy Recovery, Inc. | Q2'2024 Form 10-Q | 5

Note 1 — Description of Business and Significant Accounting Policies

Energy Recovery, Inc. and its wholly-owned subsidiaries (the “Company” or “Energy Recovery”) designs and manufactures reliable,

high-performance solutions that provide cost savings through improved energy efficiency in commercial and industrial processes, with

applications across several industries. Leveraging the Company’s pressure exchanger technology, which generates little to no emissions

when operating, the Company believes its solutions lower costs, save energy, reduce waste, and minimize emissions for companies across a

variety of commercial and 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 the Company is

committed to developing solutions that drive long-term value – both financial and environmental. The Company’s solutions are marketed,

sold in, and developed for, the fluid-flow and gas markets, such as seawater and wastewater desalination, natural gas, chemical processing

and CO2-based refrigeration systems, under the trademarks ERI®, PX®, Pressure Exchanger®, PX® Pressure Exchanger® (“PX”), Ultra PX™,

PX G™, PX G1300™, PX PowerTrain™, 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, 2023 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 June 30, 2024 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, 2023 included in the Company’s Annual

Report on Form 10-K filed with the SEC on February 21, 2024 (the “2023 Annual Report”).

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 Statement of Cash Flows and certain notes to

the Condensed Consolidated Financial Statements to conform to the current period presentation.

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ENERGY RECOVERY, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Energy Recovery, Inc. | Q2'2024 Form 10-Q | 6

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 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; granted equity award valuations;

equipment useful life and valuation; goodwill valuation and impairment; 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.

The Company is not aware of any specific event or circumstance that would require an update to its estimates or judgments or a

revision of the carrying value of its assets or liabilities as of July 31, 2024, the date of issuance of this Quarterly Report on Form 10-Q. These

estimates may change, as new events occur and additional information is obtained. Actual results could differ materially from these

estimates under different assumptions or conditions. The Company undertakes no obligation to publicly update these estimates for any

reason after the date of this Quarterly Report on Form 10-Q, except as required by law.

Significant Accounting Policies

There have been no material changes to the Company’s significant accounting policies in Note 1, “Description of Business and

Significant Accounting Policies - Significant Accounting Policies,” of the Notes to Consolidated Financial Statements included in Item 8,

“Financial Statements and Supplementary Data,” of the 2023 Annual Report.

Recently Issued Accounting Pronouncement Not Yet Adopted

There have been no issued accounting pronouncements that have not yet been adopted during the six months ended June 30, 2024

that apply to the Company other than the pronouncements disclosed in Note 1, “Description of Business and Significant Accounting Policies -

Recently Issued Accounting Pronouncement Not Yet Adopted,” of the Notes to Consolidated Financial Statements included in Item 8,

“Financial Statements and Supplementary Data,” of the 2023 Annual Report.

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ENERGY RECOVERY, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Energy Recovery, Inc. | Q2'2024 Form 10-Q | 7

Note 2 — Revenue

Disaggregation of Revenue

The following tables present the disaggregated revenues by segment, and within each segment, by geographical market based on the

customer “shipped to” address, and by channel customers. 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 June 30, 2024			Six Months Ended June 30, 2024
	Water	Emerging Technologies	Total	Water	Emerging Technologies	Total
	(In thousands)
Geographical market
Middle East and Africa	$14,467	$245	$14,712	$19,252	$246	$19,498
Asia	7,962	36	7,998	9,941	36	9,977
Americas	1,967	—	1,967	5,906	—	5,906
Europe	2,522	—	2,522	3,908	—	3,908
Total revenue	$26,918	$281	$27,199	$39,007	$282	$39,289

Channel
Megaproject	$15,815	$—	$15,815	$19,915	$—	$19,915
Original equipment manufacturer	6,909	36	6,945	10,255	36	10,291
Aftermarket	4,194	245	4,439	8,837	246	9,083
Total revenue	$26,918	$281	$27,199	$39,007	$282	$39,289


	Three Months Ended June 30, 2023			Six Months Ended June 30, 2023
	Water	Emerging Technologies	Total	Water	Emerging Technologies	Total
	(In thousands)
Geographical market
Middle East and Africa	$10,990	$108	$11,098	$13,729	$108	$13,837
Asia	7,378	—	7,378	13,492	—	13,492
Americas	1,329	—	1,329	4,537	30	4,567
Europe	817	101	918	2,052	176	2,228
Total revenue	$20,514	$209	$20,723	$33,810	$314	$34,124

Channel
Megaproject	$12,211	$—	$12,211	$15,454	$—	$15,454
Original equipment manufacturer	4,601	101	4,702	11,332	206	11,538
Aftermarket	3,702	108	3,810	7,024	108	7,132
Total revenue	$20,514	$209	$20,723	$33,810	$314	$34,124

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ENERGY RECOVERY, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Energy Recovery, Inc. | Q2'2024 Form 10-Q | 8

Contract Balances

The following table presents contract balances by category.


	June 30, 2024	December 31, 2023
	(In thousands)
Accounts receivable, net	$20,670	$46,937
Contract assets:
Contract assets, current (included in prepaid expenses and other assets)	$—	$592
Contract assets, non-current (included in other assets, non-current)	528	—
Total contract assets	$528	$592

Contract liabilities:
Contract liabilities, current	$3,214	$1,097
Contract liabilities, non-current (included in other liabilities, non-current)	—	90
Total contract liabilities	$3,214	$1,187

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 changes in contract liabilities during the period.


	June 30, 2024	December 31, 2023
(In thousands)
Contract liabilities, beginning of year	$1,187	$1,316
Revenue recognized	(1,056)	(1,254)
Cash received, excluding amounts recognized as revenue during the period	3,083	1,125
Contract liabilities, end of period	$3,214	$1,187

Remaining Performance Obligations

As of June 30, 2024, the following table presents the revenue that is expected to be recognized related to performance obligations

that are unsatisfied or partially unsatisfied.


Period		Remaining Performance Obligations