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Tomi Environmental Solutions Reports 40% Increase in Fourth Quarter Revenue

16 March 2023
  • Robust Pipeline in Life Sciences Sector Positions Business for Growth in 2023 
  • Significantly Reduced SG&A in The Quarter and Year 
  • 58% Reduction in Net Loss and Slight Adjusted EBITDA Loss in The Fourth Quarter Reflect Operating Leverage In Business Model As Company Scales 

FREDERICK, Md., March 16, 2023 (GLOBE NEWSWIRE) -- 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, today announced its financial results for the fourth quarter and year ended December 31, 2022.

TOMI Chief Executive Officer, Dr. Halden Shane, stated, “2022 delivered continued growth in our revenue and sales pipeline as well as improved year over year financial operating results.   We ended the year on a strong note as we grew fourth quarter sales by 40% compared to the same prior year period and saw 60% growth sequentially from the prior quarter. In fact, in the quarter ended December 31, 2022 we delivered our best financial results since 2020. Furthermore, we continue to see positive signs in the marketplace as our fourth quarter solution sales grew by 31% compared to our prior year fourth quarter. We expect solution sales to continue to increase, particularly as we grow our base of CES systems, which should have a positive impact on margins.

“Our recognized revenue and sales backlog for the year ended December 31, 2022, together, was $10.4 million and we saw 22% year over year growth in customer orders. The increase in sales was largely attributable to increased demand for our CES systems due to the success of our internal tech team’s ability to deliver systems in the fourth quarter of 2022, as well as an increase in mobile equipment orders due to our expanded product line which now features our fourth generation environment system, SteraPak, Select Plus and CES system.

“The higher sales, gross profit and reduced operating expenses led to improved overall annual financial results as our loss from operations declined 41% year over year and we achieved 42% improvement in our loss per share in 2022.

“We entered 2023 with strong momentum and we will continue to focus on executing our strategies to grow revenues, expand business development and deliver improved results and values for our shareholders,” Dr. Shane concluded.  

Financial Results for the year ended December 31, 2022, compared to December 31, 2021

  • Total net revenue was $8,338,000 compared to $7,754,000, an increase of $584,000, or 8%.
  • Gross margin was 60.7% compared to 59.2%. The increase in gross profit was attributable to product mix in sales.
  • Operating loss was ($2,882,000) compared to ($4,924,000). The improved operating loss was attributable to higher sales, increased gross profit and lower operating expenses.
  • Net loss was ($2,880,000) or ($0.15) per basic and diluted share, compared to ($4,435,000) or ($0.25) per basic share.
  • Adjusted EBITDA was a loss of ($1,899,000) compared to ($4,123,000). A table reconciling EBITDA to the appropriate GAAP financial measure is included with the Company’s financial information below.
  • Cash used in operations was ($1,234,000) compared to ($3,824,000), representing an improvement of $2,590,000.

Financial Results for the three months ended December 31, 2022, compared to December 31, 2021

  • Total net revenue was $2,812,000 compared to $2,010,000, an increase of $802,000, or 40%.
  • Gross margin was 58.6% compared to 54.5%. The increase in gross profit was attributable to product mix in sales.
  • Operating loss of ($706,000) compared to ($1,734,000). The improved operating loss was attributable to higher sales, increased gross profit and lower operating expenses.
  • Net loss was ($705,000) or ($0.04) per basic and diluted share, compared to ($1,660,000) or ($0.10) per basic share.
  • Adjusted EBITDA was a loss of ($268,000) compared to ($1,573,000). A table reconciling EBITDA to the appropriate GAAP financial measure is included with the Company's financial information below.

Balance sheet highlights as of December 31, 2022

  • Cash and cash equivalents were approximately $3.9 million.
  • Deferred revenue was $0.7 million.
  • Working capital was $8.8 million.
  • Shareholders’ equity was $11.4 million.

Recent Financial Highlights:

  • Recognized revenue and customer sales backlog for the year ended December 31, 2022, together, was approximately $10,362,000.
  • Received over $10,000,000 in sales orders from key global fortune 500 customers during 2022, representing 22% year over year growth compared to 2021.
  • 8% year over year growth in recognized revenue for the year ended December 31, 2022, compared to 2021.
  • 40% growth in recognized revenue for the three months ended December 31, 2022, compared the same period in 2021.
  • 60% growth in 2022 fourth quarter sales compared to the third of quarter 2022.
  • Customer sales backlog of $2,024,000 as of December 31, 2022.   

Recent Business Highlights:

  • Received purchase order for an iHP Custom Engineered System (CES) from Avid Bioservices, Inc. (Avid) for implementation in Avid’s new purpose-built viral vector development and manufacturing facility in Costa Mesa, California.
  • Announced that SteraMist is to be utilized by a world-renowned influenza vaccine company that focuses on innovative research, transformative technologies, production, and distribution.
  • Announced that the U.S. Department of Health and Human Services (HHS), the largest biomedical research agency in the world, has purchased SteraMist disinfection systems for its Africa-based Biosafety Level 3 Laboratory (BSL-3) laboratory.
  • Announced that the National Health Services (NHS) Wales purchased SteraMist ionized Hydrogen Peroxide (iHP) technology, further expanding the Company’s presence in Great Britain.
  • Launched our fourth generation SteraMist Environment System. The system will now be 24 voltages, allowing for universal outlet usage and converting even more of the hydrogen peroxide BIT Solution to hydroxyl radicals, thus lowering H2O2 PPM levels allowing for faster turnaround time. In addition, the unit will have eight (8) outputs where four (4) are dedicated to our regular process of injection, dwell, and aeration along with a light beacon status bar. Four (4) are programmable to meet the customer’s needs for any external equipment they may desire to work with the system.
  • Successfully completed a second 24-month storage stability, this one to meet US EPA requirements (first one was for EU BPR submission and had different methods/requirements). With the patented 7.8% product, our Binary Ionization Technology Solution is safe to ship by air and store under normal ambient conditions. The study will be submitted for EPA review, and the expiration date will be extended going forward upon EPA approval.
  • Soli Organic Inc., one of the nation’s largest commercial indoor organic growing companies, obtained multiple SteraMist systems to protect their controlled indoor growing food process from costly fungus, Botrytis. The combination of all SteraMist systems purchased will be used daily, on a continuous cycle, to disinfect everything from seed trays that the soil and plants sit in to the plants themselves.

Conference Call Information
TOMI will hold a conference call to discuss Fourth Quarter and Year End 2022 results at 4:30 p.m. ET today, March 16, 2023.

To participate in the call by phone, dial (877) 545-0523 approximately five minutes prior to the scheduled start time. International callers please dial (973) 528-0016. Please use the participant access code: 105041. 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/2262/47852

A replay of the teleconference will be available until Thursday, March 30, 2023, and may be accessed by dialing (877) 481-4010. International callers may dial (919) 882-2331. Callers should use replay access code: 47852. 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 This email address is being protected from spambots. You need JavaScript enabled to view it..

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, 2020 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.
CONSOLIDATED BALANCE SHEETS
    
ASSETS   
Current Assets:

   
December 31, 2022December 31, 2021
Cash and Cash Equivalents$3,866,733  $5,317,443 
Accounts Receivable - net 2,772,340   1,964,776 
Other Receivables 164,150   235,904 
Inventories 4,495,999   4,743,280 
Vendor Deposits 447,052   288,586 
Prepaid Expenses 388,359   343,573 
Total Current Assets 12,134,633   12,893,562 
    
Property and Equipment - net 1,335,331   1,488,319 
    
Other Assets:   
Intangible Assets - net 1,025,736   956,284 
Operating Lease - Right of Use Asset 528,996   583,271 
Capitalized Software Development Costs - net -   10,476 
Other Assets 475,103   341,006 
Total Other Assets 2,029,835   1,891,037 
Total Assets$15,499,799  $16,272,918 
    
LIABILITIES AND SHAREHOLDERS’ EQUITY
 
Current Liabilities:   
Accounts Payable$1,761,750  $1,054,040 
Accrued Expenses and Other Current Liabilities 728,703   664,608 
Deferred Revenue 699,732   6,000 
Current Portion of Long-Term Operating Lease 100,282   91,775 
Total Current Liabilities 3,290,467   1,816,423 
    
Long-Term Liabilities:   
Long-Term Operating Lease, Net of Current Portion 761,132   861,415 
Total Long-Term Liabilities 761,132   861,415 
Total Liabilities 4,051,599   2,677,838 
    
    
    
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 December 31, 2022 and December 31, 2021 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 December 31, 2022 and December 31, 2021 -   - 
Common stock; par value $0.01 per share, 250,000,000 shares authorized;  
19,763,955 and 19,680,955 shares issued and outstanding   
at December 31, 2022 and December 31, 2021, respectively. 197,640   196,810 
Additional Paid-In Capital 57,673,559   56,941,209 
Accumulated Deficit (46,423,637)  (43,543,577)
Total Shareholders’ Equity 11,448,200   13,595,080 
Total Liabilities and Shareholders’ Equity$15,499,799  $16,272,918 

 

TOMI ENVIRONMENTAL SOLUTIONS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
 
        
 For The Three Months Ended For The Year Ended
 December 31, December 31,
 2022 2021 2022 2021
        
Sales, net$2,811,501  $2,010,033  $8,338,099  $7,753,582 
Cost of Sales 1,164,020   914,758   3,277,644   3,166,891 
Gross Profit 1,647,480   1,095,275   5,060,455   4,586,691 
        
Operating Expenses:       
Professional Fees 144,574   140,165   536,311   538,093 
Depreciation and Amortization 81,502   68,999   329,164   294,665 
Selling Expenses 595,225   399,329   1,867,013   1,674,466 
Research and Development 97,630   78,055   352,238   572,700 
Consulting Fees 69,423   61,026   215,180   326,614 
General and Administrative 1,365,063   2,081,713   4,642,548   6,104,363 
Total Operating Expenses 2,353,417   2,829,287   7,942,454   9,510,901 
Income (loss) from Operations (705,937)  (1,734,012)  (2,881,999)  (4,924,210)
        
Other Income (Expense):       
Gain Upon Debt Extinguishment -   -   -   414,583 
Interest Income 891   378   1,939   1,076 
Interest Expense -   -   -   (1,034)
Total Other Income (Expense) 891   378   1,939   414,625 
        
Income (loss) before income taxes (705,046)  (1,733,634)  (2,880,060)  (4,509,585)
Provision for Income Taxes -   (74,086)  -   (74,086)
Net Income (loss)$(705,046) $(1,659,548) $(2,880,060) $(4,435,499)
        
Net income (loss) Per Common Share       
Basic$(0.04) $(0.10) $(0.15) $(0.25)
Diluted$(0.04) $(0.10) $(0.15) $(0.25)
        
Basic Weighted Average Common Shares Outstanding 19,763,955   16,843,045   19,743,544   17,538,994 
Diluted Weighted Average Common Shares Outstanding 19,763,955   16,843,045   19,743,544   17,538,994 

The following is a reconciliation of net income (loss) to EBITDA and Adjusted EBITDA (in thousands, except percentages; unaudited):

  For The Three Months Ended For The Years
  December 31, December 31,
  2022 2021 2022 2021
  (Unaudited) (Unaudited) (Unaudited) (Unaudited)
Net income (loss)$(705,046) $(1,659,548) $(2,880,060) $(4,435,499)
         
 Interest Income (891)  (378)  (1,939)  (1,076)
 Interest Expense -   -   -   1,034 
 Depreciation and Amortization 81,502   68,999   329,164   294,665 
 Other -   -   -   - 
 EBITDA (Loss)$(624,435) $(1,590,927) $(2,552,835) $(4,140,876)
         
 Equity Compensation Expense 356,077   18,354   653,843   18,354 
 Other -   -   -   - 
 Adjusted EBITDA (Loss)$(268,358) $(1,572,573) $(1,898,992) $(4,122,522)
         
 Net revenue$2,811,501  $2,010,033  $8,338,099  $7,753,582 
 Adjusted EBITDA Margin -10%  -78%  -23%  -53%

INVESTOR RELATIONS CONTACT:
John Nesbett/Jennifer Belodeau
IMS Investor Relations
This email address is being protected from spambots. You need JavaScript enabled to view it. 


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