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Tomi Environmental Solutions, Inc. Reports 40% Increase in Fourth Quarter Revenue

TOMI Environmental Solutions, Inc.
TOMI Environmental Solutions, Inc.

– 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.

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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 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, 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, 2022

December 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
tomi@imsinvestorrelations.com