Exhibit 99.1

ENERGY RECOVERY REPORTS UNAUDITED FINANCIAL RESULTS FOR THE FIRST QUARTER OF 2013

FIRST QUARTER HIGHLIGHTS:

SAN LEANDRO, Calif., May 8, 2013 -- Energy Recovery, Inc. (Nasdaq Global Select Market: ERII), a global leader in harnessing reusable energy from industrial fluid flows and pressure cycles, announced today its unaudited financial results for the first quarter of 2013. The Company achieved net revenue of $6.4 million in the current period, representing growth of 34% compared to the same period of last year. Insofar as both periods contained no shipments for mega-projects, the revenue growth was entirely attributable to increased OEM and aftermarket sales. Of the $6.4 million in net revenue, $4.0 million, or 62%, related to PX^® energy recovery devices and related products and services, while $2.4 million, or 38%, pertained to turbochargers, pumps, and related products and services. The product mix in the first quarter of 2013 was comparable to the same period of the prior year, although a sequential comparison to the three preceding quarters demonstrates a higher percentage in the current period associated with turbochargers and pumps, which command lower gross profit margins compared to PX devices. Acknowledging normal seasonality trends that manifest from past performance, revenue in the first quarter generally represents the lowest volume in the calendar year. Similarly, the Company anticipates that mega-project shipments will commence in the second quarter of 2013, starting first with the previously announced project in Ghana, and then escalate through subsequent quarters of the year, with the fourth quarter expected to contain a significant volume of mega-project shipments. Importantly, several of these projects for which revenue is forecasted are in the final phases of negotiation and should accrue to backlog in the second quarter of 2013.

On the $1.6 million increase in net revenue, the Company recorded a gross profit margin of 47% in the first quarter of 2013 compared to 26% in the first quarter of 2012. The improvement in gross profit margin resulted primarily from positive operating leverage achieved through increased volume as well as cost savings realized through enhanced manufacturing yields and other production efficiencies. The aforementioned product mix, consisting of a heavier portion of turbochargers and pumps when compared to the previous three quarters, represented a drag on gross profit margin in the current period due to the comparatively lower gross profit margin associated with these product classes. With lighter revenue due to normal seasonality trends and the absence of mega-project activity along with a less favorable product mix, management was pleased to generate such levels of gross profit margin, believing that such profit potential implies strong performance in the ensuing quarters of the current year. Consequently, the Company expects that gross profit margins will increase sequentially throughout the year due to greater volume caused by mega-project shipments, a more favorable product mix that better favors PX devices, and the continued realization of cost savings and production efficiencies.

In the context of increased revenue and improved gross profit margin, operating expenses increased from $5.9 million in the first quarter of 2012 to $7.5 million in the current period, reflecting an overall increase of $1.6 million, or 26%. Due principally to transition costs caused by personnel changes in the IT and accounting functions, general and administrative expense increased $0.7 million, or 20%. Similarly, sales and marketing expense increased $0.5 million, or 36%, due primarily to increased consulting costs specific to market research and rebranding. As part of long-range strategic planning and to facilitate internal growth targets, the Company has engaged a renowned management consulting firm to map out industrial fluid markets for subsequent prioritization, planning, and penetration. Also as a component of operating expenses, research and development costs increased by $0.4 million, or 56%, as the Company continues its investment in product development for oil & gas applications. On this point, R&D resources remain focused on technical validation and commercialization for three new oil & gas solutions in partnership with high-profile oil & gas companies on different continents. In the first quarter of 2013, the Company hired its first dedicated sales professional to support this commercialization, with plans to hire more in the coming months. While the Company recognized no revenue related to oil & gas shipments in the current quarter, management remains confident in the technological feasibility of the product portfolio and the economic viability of the value proposition.

In the context of increased revenue, improved gross profit margin, and higher operating expenses, the Company reported a net loss of $(4.5) million, or $(0.09) per share, in the first quarter of 2013. Comparatively, the Company reported a net loss of $(4.7) million, or $(0.09) per share, in the first quarter of 2012. Importantly, management predicts that net loss or income will improve through subsequent quarters of the current year as revenue increases and gross profit margin improves.

After operating losses in the first quarter of 2013, the Company’s balance sheet and cash position remain sound. Excluding current and non-current restricted cash of $9.5 million, the Company reported unrestricted cash of $13.4 million, short-term investments of $8.0 million, and long term-investments of $5.4 million, all of which represent a combined total of $26.8 million as of March 31, 2013. For the current period, the net loss of $(4.5) million was adjusted to $(2.7) million by non-cash items totaling $1.8 million, the largest of which were depreciation and amortization of $0.9 million and stock-based compensation of $0.7 million. The net cash impact from changes in working capital was approximately $(1.2) million for the first quarter of 2013. While accounts receivable and unbilled receivables decreased by nearly $3.7 million due to collections for large shipments completed in 2012, the increase in inventory used $1.5 million as the Company manufactured finished product in anticipation of subsequent mega-project shipments. Additionally, in the first quarter of 2013, the Company paid annual bonuses and sales commissions in recognition of significantly improved financial results in 2012 as compared to 2011. Capital expenditures were modest in the current period, with $0.4 million invested primarily for a new ERP system designed to enhance managerial reporting. Consequently, although the first quarter of 2013 saw a decrease in cash of $3.2 million along with a decrease in short- and long-term investments of $0.9 million, these results were in keeping with normal seasonality trends, considering that the first quarter typically demonstrates operating losses and includes cash outflow items associated with the end of the prior year. Also worth noting is that the balance sheet includes $15.4 million of accounts receivable and unbilled receivables, much of which management expects to convert to cash in the second quarter of 2013.

Tom Rooney, President and Chief Executive Officer, commented, “The first quarter results were in line with our expectations, as mega-project activity is expected to commence in the second quarter and increase sequentially throughout the year. While we anticipate similar revenue levels in 2013 as compared to those achieved in 2012, with the fourth quarter representing a significant portion of revenue due to the timing of mega-project shipments, we expect to drive improved bottom-line performance through ongoing cost-reduction and efficiency-enhancing initiatives that are estimated to favorably affect gross profit margins. Beyond 2013, we anticipate significant growth in 2014 as the sales pipeline for major desalination projects firms up and our oil & gas strategy continues to progress. We remain focused on our strategy to maintain a commanding position in the core desalination market, marked by strong market share and increasing profitability, while investing heavily in new market expansion with a preeminent focus on oil & gas applications. Thus, we remain excited about the prospects of this great company and our progress against strategic and financial objectives.”

Forward-Looking Statements

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 are based on information currently available to us and on management’s beliefs, assumptions, estimates, or projections and are not guarantees of future events or results. When used in this document, the words “anticipate,” “believe,” “estimate,” “expect,” “imply,” “intend,” “may,” “plan,” “predict,” “remain,” “should,” “will,” and similar expressions are intended to identify forward-looking statements, but are not exclusive means of identifying such statements. Because such forward-looking statements involve risks and uncertainties, the Company's actual results may differ materially from the predictions in these forward-looking statements. All forward-looking statements are made as of today, and the Company assumes no obligation to update such statements. In addition to any other factors that may have been discussed herein regarding the risks and uncertainties of our business, please see “Risk Factors” in our Form 10-K filed with the U.S. Securities and Exchange Commission (“SEC”) on March 12, 2013 as well as other reports filed by the Company with the SEC from time to time.

Conference Call to Discuss First Quarter Results

The conference call scheduled for tomorrow at 7:30 a.m. PDT will be in a "listen-only" mode for all participants other than the sell-side investment professionals who regularly follow the Company. The toll-free phone number for the call is 877-941-0844 or local 480-629-9835, and the access code is 4611790. Callers should dial in approximately 15 minutes prior to the scheduled start time. A telephonic replay will be available at 800-406-7325 or local 303-590-3030 (access code: 4611790) until May 23, 2013. Investors may also access the live call or the replay over the internet at www.streetevents.com or www.energyrecovery.com. The replay will be available approximately three hours after the live call concludes.

About Energy Recovery, Inc.

Energy Recovery, Inc. (Nasdaq Global Select Market: ERII) is the world leader in harnessing energy from industrial fluid flows and pressure cycles. The Company’s innovations make industrial processes within the water, oil & gas, and chemical industries environmentally cleaner and economically more profitable. By developing the highest-efficiency technologies that deliver substantial cost savings, Energy Recovery’s solutions offer the best economics for any industrial application. In total, the Company has installed 14,000 devices on every continent, saving its clients more than one billion dollars in energy costs each year. The company is headquartered in the San Francisco Bay Area with offices worldwide, including Madrid, Shanghai, and Dubai. For more information about Energy Recovery, please visit www.energyrecovery.com.

Contact:
Alexander J. Buehler
Chief Financial Officer
(510) 483-7370

Unaudited Consolidated Financial Results 

ENERGY RECOVERY, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share data)

(unaudited)

ENERGY RECOVERY, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except share data and par value)

(unaudited)

ENERGY RECOVERY, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

(unaudited)