TOMI Environmental Solutions, Inc.® (“TOMI”) (NASDAQ: TOMZ), a
global company specializing in disinfection and decontamination
utilizing its premier Binary Ionization Technology (BIT) platform
through its SteraMist brand of products, announced its financial
results for the first quarter of 2023.
TOMI Chief Executive Officer, Dr. Halden Shane, stated, “In the
first quarter we continued to expand our sales channels and
distribution networks, increased brand awareness through marketing
efforts and achieved a major milestone with one of our major
customers.
“During the first quarter, we expanded our sales footprint
domestically and abroad with the addition of one key manufacturing
representative and five strategic distributors.
“We also received acceptance from a U.S.-based multinational
pharmaceutical and biotechnology customer to supply their
international facilities. This is a major milestone for us,
providing us the opportunity to potentially supply their many
additional facilities around the world.
“Our first quarter revenue was impacted by
revenue recognition rules and customer-imposed delivery
restrictions for equipment and CES orders. We expect to realize
these revenues in subsequent quarters this year. Our recognized
revenue and customer sales backlog for the three months ended March
31, 2023, together, was approximately $3,129,000 which was
comprised of recognized revenue of $1,582,000 and a customer sales
backlog of approximately $1,547,000.
“We are optimistic about our performance going
forward. With our sales backlog, expanding distribution network and
robust sales pipeline particularly for our CES product, we
anticipate reporting improved financial results for the remainder
of calendar 2023.”
Financial Results for the Three Months Ended March 31,
2023 compared to March 31, 2022
- Total net revenue was $1,582,000 compared to $2,309,000.
- Gross margin was 59.5% compared to 61.5%. The decrease in gross
profit was attributable to product mix in sales.
- Operating loss was ($1,188,000) compared to
($660,000).
- Net loss was ($1,187,000) or ($0.06) per basic and diluted
share, compared to ($659,000) or ($0.03) per basic share.
- Adjusted EBITDA was a loss of ($941,000) compared to
($280,000). A table reconciling EBITDA to the appropriate GAAP
financial measure is included with the Company’s financial
information below.
Balance sheet highlights as of March 31,
2023
- Cash and cash equivalents were approximately $2.5 million.
- Deferred revenue was $0.6 million.
- Working capital was $7.9 million.
- Shareholders’ equity was $10.5 million.
Recent Business Highlights:
- Expanded our sales channels and distribution networks with the
following manufacturing representatives and distributors:
- U.S.-based medical supplier and distributor, JANZ Corporation,
holds government contracts to provide medical and healthcare
products to the Department of Homeland Security, Defense Logistics
Agency, and Department of Defense. This collaboration presents an
opportunity for us to expand its reach into the government sector
as a trusted provider of disinfection.
- We also welcomed New England Scientific Associates (NESA) by
Baker as a new independent manufacturing representative. NESA by
Baker represents leading manufacturers of biotechnology and
research equipment. With NESA's expertise and established
infrastructure, SteraMist is well-positioned to achieve success in
our new turnkey integration projects, which involves integrating
SteraMist into cage washers, decontamination chambers, and other
related equipment.
- Globally, we joined forces with Crow Food Safety (Pty) Ltd,
also trading as Crow Environmental Solutions. The company is a life
science and medical industry distributor and a preferred supplier
of food safety and hygiene products in South Africa and Sub-Saharan
Africa, representing our first venture in this region, while
furthering expansion in the food safety industry on a global
scale.
- In a strategic move to further its reach in the life sciences
industry, our manufacturing representative, ARES Scientific, has
evolved its service model and is now a new distributor of our
products. With a track record of successfully selling SteraMist,
ARES Scientific has earned a reputation as a reliable and
innovative provider of cutting-edge products for vivarium and life
science facilities. The new role of ARES as a SteraMist distributor
opens growth opportunities for us in the life science market.
- Added PennCare as a distributor which will help strengthen our
presence in the emergency medical services market throughout the
United States.
- Expanded our presence in Canada with the addition of
Technimount System which will now serve as an exclusive distributor
selling capital equipment to the emergency medical services market
throughout Canada. Technimount System is a highly reputable
manufacturer and distributor that provides products to a variety of
industries, including emergency medical services, hospitals, and
military environments. With an extensive network of customers,
Technimount has established itself as a trusted source for
high-quality products and services.
- Received notification of global acceptance as a vendor from
Pfizer an American multinational pharmaceutical and biotechnology
corporation, which we have been providing iHP decontamination
services and selling capital equipment to many of its facilities
for many years. This represents a major milestone for us, as it
promises to allow for easier acceptance in future and additional
facilities of the corporation and its subsidiaries.
- Presented our SteraMist brand of products at three leading
pharmaceutical conferences held by the International Society for
Pharmaceutical Engineering (ISPE).
- Delivered a CES system to Orna Therapeutics, a leading
biotechnology company located in Massachusetts.
- Added notable research universities customers to our growing
portfolio with the addition of the University of Hawaii and Oregon
State University.
- Entered into a Service Agreement with LFB USA a company within
the LFB Group, a leading European biopharmaceutical company
specialized in the development and manufacturing of innovative
biotherapies which commits LFB to engage TOMI for high level
disinfection of one or more facilities.
- Vertical Crop Consultants, a Food Safety Independent Sales
Representative partner to TOMI as of late last year, was onboarded
as a formal customer during our first quarter 2023. Vertical Crop
has generated interest in the industry during their short time with
TOMI and now as a customer completed a joint study with an American
seed company and head breeder for one of the world’s most famous
cannabis strains. This third-party study found SteraMist to be
effective in eliminating aspergillus and powdery mildew while
protecting cannabis growth and without affecting quality. Each
phase of the study proved SteraMist iHP can be a consistent
solution to prevent spores at every stage of the growing process, a
huge cost savings for the industry.
Conference Call InformationTOMI will hold a
conference call to discuss First Quarter 2023 results at 4:30 p.m.
ET today, May 15, 2023.
To participate in the call by phone, dial (844) 369-8770
approximately five minutes prior to the scheduled start time and
request the "TOMI Environmental Solutions first quarter earnings
call." International callers please dial (862) 298-0840. To access
the live webcast or view the press release, please visit the
Investor Relations section of the TOMI website or register at the
following link:
https://www.webcaster4.com/Webcast/Page/2262/48392.
A replay of the teleconference will be available until Monday,
May 29, 2023, and may be accessed by dialing (877) 481-4010.
International callers may dial (919) 882-2331. Callers should use
replay access code: 48392. A replay of the webcast will be
available for at least 90 days on the company’s website, starting
approximately one hour after the completion of the call.
TOMI™ Environmental Solutions, Inc.: Innovating for
a safer world®TOMI™ Environmental Solutions, Inc.
(NASDAQ:TOMZ) is a global decontamination and infection prevention
company, providing environmental solutions for indoor surface
disinfection through the manufacturing, sales and licensing of its
premier Binary Ionization Technology® (BIT™) platform.
Invented under a defense grant in association with the Defense
Advanced Research Projects Agency (DARPA) of the U.S. Department of
Defense, BIT™ solution utilizes a low percentage Hydrogen
Peroxide as its only active ingredient to produce a fog of ionized
Hydrogen Peroxide (iHP™). Represented by the SteraMist® brand
of products, iHP™ produces a germ-killing aerosol that works
like a visual non-caustic gas. TOMI products are designed
to service a broad spectrum of commercial structures, including,
but not limited to, hospitals and medical facilities, cruise ships,
office buildings, hotel and motel rooms, schools, restaurants, meat
and produce processing facilities, military barracks, police and
fire departments, and athletic facilities. TOMI products
and services have also been used in single-family homes and
multi-unit residences.
TOMI develops training programs and application protocols
for its clients and is a member in good standing with The American
Biological Safety Association, The American Association of Tissue
Banks, Association for Professionals in Infection Control and
Epidemiology, Society for Healthcare Epidemiology of America,
America Seed Trade Association, and The Restoration Industry
Association.
For additional information, please
visit http://www.tomimist.com/ or contact us
at info@tomimist.com.
Forward-Looking Statements
This press release contain forward-looking statements that are
based on current expectations, estimates, forecasts and projections
of future performance based on management’s judgment, beliefs,
current trends, and anticipated product performance. These
forward-looking statements include, without limitation, expected
sales pipeline; financial performance and operating results for
2023; upcoming launch of new products; expected growth in sales and
market demand; revenue opportunities of CES products and brand
recognition of our products. Forward-looking statements involve
risks and uncertainties that may cause actual results to differ
materially from those contained in the forward-looking statements.
These factors include, but are not limited to, the impact of
COVID-19 pandemic on our business and customers; our ability to
maintain and manage growth and generate sales, our reliance on a
single or a few products for a majority of revenues; the general
business and economic conditions; and other risks as described in
our SEC filings, including our Annual Report on Form 10-K for the
fiscal year ended December 31, 2022 filed by us with the SEC and
other periodic reports we filed with the SEC. The information
provided in this document is based upon the facts and circumstances
known at this time. Other unknown or unpredictable factors or
underlying assumptions subsequently proving to be incorrect could
cause actual results to differ materially from those in the
forward-looking statements. Although we believe that the
expectations reflected in the forward-looking statements are
reasonable, we cannot guarantee future results, level of activity,
performance, or achievements. You should not place undue reliance
on these forward-looking statements. All information provided in
this press release is as of today’s date, unless otherwise stated,
and we undertake no duty to update such information, except as
required under applicable law.
Use of Non-GAAP Financial Measures
To supplement our unaudited consolidated financial statements
presented on a basis consistent with U.S. GAAP, we disclose certain
non-GAAP financial measures for our historical performance,
including EBITDA, Adjusted EBITDA and Adjusted EBITDA Margin. We
define EBITDA as net income (loss), adjusted to exclude: interest,
taxes, depreciation and amortization (EBITDA) is a non-GAAP
financial measure and is intended to serve as a supplement to our
results provided in accordance with GAAP. We define Adjusted EBITDA
as net income (loss), adjusted to exclude: interest, taxes,
depreciation and amortization; stock-based compensation expense. We
define Adjusted EBITDA margin as Adjusted EBITDA divided by net
revenue. We believe that these historical non-GAAP financial
measures provide useful information to both management and
investors by excluding certain items and expenses that are not
indicative of our core operating results or do not reflect our
normal business operations. In addition, our management uses
non-GAAP measures to evaluate our performance internally and to
benchmark our performance externally against competitors. Our use
of non-GAAP financial measures has certain limitations in that such
non-GAAP financial measures may not be directly comparable to those
reported by other companies. Although we believe that the use of
non-GAAP financial measures enhances its investors’ understanding
of its business and performance, our use of non-GAAP financial
measures should not be considered an alternative to GAAP basis
financial measures and should be read in conjunction with the
relevant GAAP financial measures. Other companies may use the same
or similarly named measures, but exclude different items, which may
not provide investors with a comparable view of our performance in
relation to other companies. Because of these limitations, the
non-GAAP financial measure used in this release should not be
considered in isolation or as a substitute for performance measures
calculated in accordance with GAAP. We seek to compensate for the
limitation of our non-GAAP presentation by providing a detailed
reconciliation of the non-GAAP financial measures to the most
directly comparable U.S. GAAP as set forth below. Investors are
encouraged to review the related U.S. GAAP financial measures and
the reconciliation of these non-GAAP financial measures to their
most directly comparable U.S. GAAP financial measures.
TOMI ENVIRONMENTAL SOLUTIONS, INC. |
CONDENSED CONSOLIDATED BALANCE SHEETS |
|
|
|
|
ASSETS |
|
|
|
|
|
|
|
Current Assets: |
March 31, 2023 (Unaudited) |
December 31, 2022 |
Cash and Cash Equivalents |
$ |
2,469,300 |
|
|
$ |
3,866,733 |
|
Accounts Receivable - net |
|
2,490,687 |
|
|
|
2,772,340 |
|
Other Receivables |
|
164,150 |
|
|
|
164,150 |
|
Inventories |
|
4,353,458 |
|
|
|
4,495,999 |
|
Vendor Deposits |
|
514,203 |
|
|
|
447,052 |
|
Prepaid Expenses |
|
412,975 |
|
|
|
388,359 |
|
Total Current Assets |
|
10,404,773 |
|
|
|
12,134,633 |
|
|
|
|
|
Property and Equipment –
net |
|
1,274,617 |
|
|
|
1,335,331 |
|
|
|
|
|
Other Assets: |
|
|
|
Intangible Assets – net |
|
1,021,962 |
|
|
|
1,025,736 |
|
Operating Lease - Right of Use
Asset |
|
514,400 |
|
|
|
528,996 |
|
Other Assets |
|
520,684 |
|
|
|
475,103 |
|
Total Other Assets |
|
2,057,046 |
|
|
|
2,029,835 |
|
Total Assets |
$ |
13,736,436 |
|
|
$ |
15,499,799 |
|
|
|
|
|
LIABILITIES AND SHAREHOLDERS’ EQUITY |
|
Current Liabilities: |
|
|
|
Accounts Payable |
$ |
1,281,442 |
|
|
$ |
1,761,750 |
|
Accrued Expenses and Other Current Liabilities |
|
528,800 |
|
|
|
728,703 |
|
Deferred Revenue |
|
618,490 |
|
|
|
699,732 |
|
Current Portion of Long-Term Operating Lease |
|
106,230 |
|
|
|
100,282 |
|
Total Current Liabilities |
|
2,534,962 |
|
|
|
3,290,467 |
|
|
|
|
|
Long-Term Liabilities: |
|
|
|
Long-Term Operating Lease, Net of Current Portion |
|
730,928 |
|
|
|
761,132 |
|
Total Long-Term Liabilities |
|
730,928 |
|
|
|
761,132 |
|
Total Liabilities |
|
3,265,890 |
|
|
|
4,051,599 |
|
|
|
|
|
Commitments and
Contingencies |
|
- |
|
|
|
- |
|
|
|
|
|
Shareholders’ Equity: |
|
|
|
Cumulative Convertible Series A Preferred Stock; par value $0.01
per share, 1,000,000 shares authorized; 63,750 shares issued and
outstanding at March 31, 2023 and December 31, 2022 |
|
638 |
|
|
|
638 |
|
Cumulative Convertible Series B Preferred Stock; $1,000 stated
value; 7.5% Cumulative dividend; 4,000 shares authorized; none
issued and outstanding at March 31, 2023 and December 31, 2022 |
|
- |
|
|
|
- |
|
Common stock; par value $0.01 per share, 250,000,000 shares
authorized; 19,763,955 and 16,761,513 shares issued and
outstanding at March 31, 2023 and December 31, 2022,
respectively. |
|
198,240 |
|
|
|
197,640 |
|
Additional Paid-In Capital |
|
57,882,792 |
|
|
|
57,673,559 |
|
Accumulated Deficit |
|
(47,611,124 |
) |
|
|
(46,423,637 |
) |
Total Shareholders’ Equity |
|
10,470,546 |
|
|
|
11,448,200 |
|
Total Liabilities and
Shareholders’ Equity |
$ |
13,736,436 |
|
|
$ |
15,499,799 |
|
|
|
|
|
TOMI ENVIRONMENTAL SOLUTIONS, INC. |
CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS |
|
|
|
|
|
For The Three Months Ended |
|
March 31, |
|
|
2023 |
|
|
|
2022 |
|
|
|
|
|
Sales, net |
$ |
1,582,172 |
|
|
$ |
2,308,584 |
|
Cost of Sales |
|
640,935 |
|
|
|
887,889 |
|
Gross Profit |
|
941,237 |
|
|
|
1,420,695 |
|
|
|
|
|
Operating Expenses: |
|
|
|
Professional Fees |
|
137,185 |
|
|
|
190,530 |
|
Depreciation and Amortization |
|
88,776 |
|
|
|
82,292 |
|
Selling Expenses |
|
376,653 |
|
|
|
340,789 |
|
Research and Development |
|
70,520 |
|
|
|
37,076 |
|
Consulting Fees |
|
75,455 |
|
|
|
63,210 |
|
General and Administrative |
|
1,380,794 |
|
|
|
1,366,625 |
|
Total
Operating Expenses |
|
2,129,383 |
|
|
|
2,080,522 |
|
Income (loss) from Operations |
|
(1,188,146 |
) |
|
|
(659,827 |
) |
|
|
|
|
Other
Income (Expense): |
|
|
|
Gain Upon Debt Extinguishment |
|
- |
|
|
|
- |
|
Interest Income |
|
659 |
|
|
|
343 |
|
Interest Expense |
|
- |
|
|
|
- |
|
Total
Other Income (Expense) |
|
659 |
|
|
|
343 |
|
|
|
|
|
Income (loss) before income taxes |
|
(1,187,487 |
) |
|
|
(659,484 |
) |
Provision for Income Taxes |
|
- |
|
|
|
- |
|
Net
Income (loss) |
$ |
(1,187,487 |
) |
|
$ |
(659,484 |
) |
|
|
|
|
Net
income (loss) Per Common Share |
|
|
|
Basic |
$ |
(0.06 |
) |
|
$ |
(0.03 |
) |
Diluted |
$ |
(0.06 |
) |
|
$ |
(0.03 |
) |
|
|
|
|
Basic
Weighted Average Common Shares Outstanding |
|
19,806,622 |
|
|
|
19,718,330 |
|
Diluted Weighted Average Common Shares Outstanding |
|
19,806,622 |
|
|
|
19,718,330 |
|
|
|
|
|
The following is a reconciliation of net income (loss) to EBITDA
and Adjusted EBITDA (in thousands, except percentages;
unaudited):
|
For The Three Months Ended |
|
March 31, |
|
|
2023 |
|
|
|
2022 |
|
|
(Unaudited) |
|
(Unaudited) |
Net income (loss) |
$ |
(1,187,487 |
) |
|
$ |
(659,484 |
) |
|
|
|
|
Interest Income |
|
(659 |
) |
|
|
(343 |
) |
Interest Expense |
|
- |
|
|
|
- |
|
Depreciation and Amortization |
|
88,776 |
|
|
|
82,292 |
|
Other |
|
- |
|
|
|
- |
|
EBITDA (Loss) |
$ |
(1,099,371 |
) |
|
$ |
(577,535 |
) |
|
|
|
|
Equity Compensation Expense |
|
158,833 |
|
|
|
297,766 |
|
Other |
|
- |
|
|
|
- |
|
Adjusted EBITDA (Loss) |
$ |
(940,538 |
) |
|
$ |
(279,769 |
) |
|
|
|
|
Net revenue |
$ |
1,582,171 |
|
|
$ |
2,308,584 |
|
Adjusted EBITDA Margin |
|
-59 |
% |
|
|
-12 |
% |
|
|
|
|
|
|
|
|
INVESTOR RELATIONS CONTACT:John Nesbett/Roz ChristianIMS
Investor Relationstomi@imsinvestorrelations.com
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