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 second quarter and first six months of
2021.
TOMI Chief Executive Officer, Dr. Halden Shane stated, “As we
move through 2021, we continue to face sharp comparisons in the
context of last year’s results which were driven by extraordinary
demand for our products as customers, both existing and new, sought
disinfection and decontamination solutions during the height of the
COVID-19 pandemic. As COVID-19 concerns have eased, our sales
volumes have slowed, particularly in our Hospital-HealthCare, TOMI
Service Network, and Commercial divisions, and that slowdown
resulted in second quarter revenue performance that was in line
with pre-virus levels. However, as the economy continues to open
back up, we have seen positive indicators among our current and
prospective customers which we expect will drive increased demand
in the second half of 2021.”
“Specifically, we are seeing renewed interest and activity
around our environment and permanent customer engineered systems
(CES) in the Life Science market. On the product development front,
earlier this month we announced the launch of SteraPak, a backpack
system that represents the most mobile SteraMist unit available,
designed to create easy maneuverability in the smallest spaces.
Providing superior disinfection technology at a lower price point
than our competitors, we believe SteraPak will open up new sales
channels for our products and ultimately get our technology in the
hands of more businesses and consumers. Additionally we have made
solid progress with our SteraMist Select Plus and SteraMist
Transport CES units and believe we are nearing a release date for
these products.
“As we move through the balance of 2021, we view this as a
rebuilding period. The unprecedented Covid-related demand we
experienced in 2020 raised our profile in the marketplace and
allowed us to significantly broaden our customer base. We remain
focused on meeting the needs of our existing customers and further
expanding our customer relationships by continuing to provide our
state-of-the-art disinfection technology and solutions, while
attracting new audiences with our innovative new products. Our
second quarter results did not meet our expectations, but, with our
visibility today, we are optimistic that TOMI will deliver a strong
second half of the year. While we cannot predict with certainty the
course of the pandemic and how it will affect our industry, we
believe that a permanent shift in the disinfection practice of
commercial and business operations will continue to generate
healthy demand for our products.
“Accordingly, despite the decline of revenue during the second
quarter, we expect to see significant revenue growth in the second
half of the year over the first half. Based on momentum we
are seeing thus far this quarter across our product platform as
well as the Q3 launch of our new SteraPak, we are targeting strong
sequential growth in Q3 over Q2 and double-digit revenue in
Q4. As stated before our mission is and will always be to make
the world a safer place.”
Financial Results for the Three Months Ended June 30,
2021 compared to June 30, 2020
- Total net revenue was $1.5 million compared to $10.0
million.
- Gross margin was 64.3% compared to 55.5%. The increase in gross
margin is attributable to product mix.
- Operating loss was ($1.2 million) compared to operating income
of $3.7 million.
- Net loss was ($0.8 million) or ($0.05) per basic and diluted
share, compared to net income of $3.7 million or $0.22 per basic
share.
- EBITDA was a loss of ($0.7 million) compared to EBITDA of $3.8
million. A table reconciling EBITDA to the appropriate GAAP
financial measure is included with the Company's financial
information below.
- Adjusted EBITDA was a loss of ($0.7 million) compared to
Adjusted EBITDA of $3.9 million. A table reconciling Adjusted
EBITDA to the appropriate GAAP financial measure is included with
the Company's financial information below.
Balance sheet highlights
as of June 30, 2021
- Cash and cash equivalents were approximately $2.5 million
compared to $5.2 million at December 31, 2020, a decrease of $2.7
million.
- Working capital was $8.8 million compared to $11.5 million at
December 31, 2020.
- Shareholders’ equity was $11.1 million compared to $13.2
million at December 31, 2020, a decrease of $2.1 million.
Recent Business Highlights:
- Received an order which secured a project to install an iHP
Custom Engineered System (CES) for a major pharmaceutical Company
in Western Europe.
- Launched the SteraPak portable SteraMist System. The Company is
currently taking deposits from customers for the product and
expects to begin filling backlog orders in the third quarter 2021.
SteraPak is sold through all divisions including
Hospital-Healthcare, Life Sciences, TOMI Service Network (TSN),
Food Safety, and Commercial.
- Continued product development with the introduction of the
SteraMist Select Plus and the SteraMist Transport CES (Custom
Engineered System).
- Named to the Russell Microcap Index in June 2021
- The Company’s partnership with AV8R Solutions, a SteraMist
service provider and manufacturing representative with focus on
aviation industry, demonstrated continued traction with AV8R’s
announced intention to partner with insurance companies to expand
into the restoration and remediation industry.
Recent Progress with Scientific Studies and Industry
Testing:
- Finished gathering successful and critical data from our Shield
Study, a multi-year study comparing SteraMist with manual cleaning.
The Study was conducted by multiple well-established hospitals and
initial findings have been positive regarding ease of use, overall
efficacy, and quick turnaround time of patient rooms. TOMI looks
forward to announcing the full results as they are available to
make public.
- TOMI continues to work with its German aircraft partner and
Boeing in a third-party test required for the aviation industry.
TOMI incurs no cost for this work as both testing partners are
clients.
- Engaged HYGCEN Germany GmbH to perform a quantitative test of
germ carriers for airborne room disinfection and testing of the
effectiveness of a method for disinfecting room air to meet the new
EU norm (standard) EN 17272. Certification that Binary Ionization
Technology meets the new standard will continue to position iHP as
the premier decontamination/disinfection technology available on
the market today.
- The Company continues to work with the Virginia State
University Agricultural Research Station and its partner, Arkema on
a food safety pilot study based on novel, nonthermal, and
environmentally friendly technology to control foodborne pathogens
on industrial hemp seed as representative model foods. TOMI
anticipates the pilot will be completed by the third quarter of
2021.
- Partnered with the Department of Chemistry and Biochemistry of
Texas Tech University to conduct a wide range of studies on spray
pattern, deposition, and hydrogen peroxide content in order to
compare our 1% label to other similar products on the market.
- TOMI is working with University of Virginia on two separate
studies. The first, which explores SteraMist’s efficacy against
SARS-CoV-2, reported successful results and is currently awaiting
the final published paper. The second, using the handheld SteraMist
Surface Unit and testing spray and contact time variables against
Adenovirus is currently awaiting results. TOMI anticipates the
testing will be completed by the third quarter of 2021.
- TOMI's long term relationship with USDA Agricultural Research
Service continues to progress. Earlier this year, "Hydrogen
peroxide residue on tomato, apple, cantaloupe, and Romaine lettuce
after treatments with cold plasma-activated hydrogen peroxide” was
accepted for publication in the Journal of Food Microbiology. TOMI
has also begun discussions with another ARS facility to evaluate
the benefits of iHP on blueberries to prevent rot and reduce
post-harvest losses.
Conference Call Information
TOMI will hold a conference call to discuss second quarter 2021
results at 4:30 p.m. ET today, August 16, 2021.
To participate in the call by phone, dial (888) 506-0062 and
entry code 952095 approximately five minutes prior to the scheduled
start time. International callers please dial (973) 528-0011 and
entry code 952095. To access the live webcast or view the press
release, please visit the Investor Relations section of the TOMI
website at:
http://investor.tomimist.com/TOMZ/webcasts_and_events/2145
A replay of the teleconference will be available until August
23, 2021 and may be accessed by dialing (877) 481-4010.
International callers may dial (919) 882-2331. Callers should use
replay access code: 42439. 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, statements
relating to anticipated financial performance and operating
results; upcoming launch of new products; expected growth in sales
and market demand; timing and process relating to research studies
and testing; impact of COVID-19 pandemic on our business operation;
and our ability to execute sale strategies. 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. |
CONDENSED CONSOLIDATED BALANCE SHEET |
|
|
|
|
ASSETS |
|
|
|
|
|
|
|
Current Assets: |
June 30, 2021 (Unaudited) |
|
December 31, 2020 |
Cash and Cash Equivalents |
$ |
2,488,413 |
|
|
$ |
5,198,842 |
|
Accounts Receivable - net |
|
2,980,292 |
|
|
|
3,716,701 |
|
Other Receivables |
|
- |
|
|
|
198,951 |
|
Inventories |
|
5,175,979 |
|
|
|
3,781,515 |
|
Vendor Deposits |
|
24,224 |
|
|
|
388,712 |
|
Prepaid Expenses |
|
388,271 |
|
|
|
421,305 |
|
Total Current Assets |
|
11,057,179 |
|
|
|
13,706,027 |
|
|
|
|
|
Property and Equipment – net |
|
1,280,092 |
|
|
|
1,298,103 |
|
|
|
|
|
Other Assets: |
|
|
|
Intangible Assets – net |
|
831,768 |
|
|
|
722,916 |
|
Operating Lease - Right of Use Asset |
|
608,111 |
|
|
|
631,527 |
|
Capitalized Software Development Costs - net |
|
31,426 |
|
|
|
52,377 |
|
Other Assets |
|
472,173 |
|
|
|
358,935 |
|
Total Other Assets |
|
1,943,478 |
|
|
|
1,765,755 |
|
Total Assets |
$ |
14,280,749 |
|
|
$ |
16,769,885 |
|
|
|
|
|
LIABILITIES AND SHAREHOLDERS’ EQUITY |
|
|
|
|
|
|
|
Current Liabilities: |
|
|
|
Accounts Payable |
$ |
1,534,172 |
|
|
$ |
1,501,469 |
|
Accrued Expenses and Other Current Liabilities |
|
568,502 |
|
|
|
501,849 |
|
Customer Deposits |
|
41,827 |
|
|
|
118,880 |
|
Current Portion of Long-Term Operating Lease |
|
86,391 |
|
|
|
81,223 |
|
Total Current Liabilities |
|
2,230,892 |
|
|
|
2,203,421 |
|
|
|
|
|
Long-Term Liabilities: |
|
|
|
Loan Payable |
|
- |
|
|
|
410,700 |
|
Long-Term Operating Lease, Net of Current Portion |
|
908,677 |
|
|
|
953,190 |
|
Total Long-Term Liabilities |
|
908,677 |
|
|
|
1,363,890 |
|
Total Liabilities |
|
3,139,569 |
|
|
|
3,567,311 |
|
|
|
|
|
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 June 30, 2021 and December 31, 2020 |
|
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 June 30, 2021 and December 31, 2020 |
|
- |
|
|
|
- |
|
Common stock; par value $0.01 per share, 250,000,000 shares
authorized; |
|
|
16,811,513 and 16,761,513 shares issued and outstanding |
|
|
at June 30, 2021 and December 31, 2020, respectively. |
|
168,115 |
|
|
|
167,615 |
|
Additional Paid-In Capital |
|
52,369,899 |
|
|
|
52,142,399 |
|
Accumulated Deficit |
|
(41,397,471 |
) |
|
|
(39,108,078 |
) |
Total Shareholders’ Equity |
|
11,141,180 |
|
|
|
13,202,574 |
|
Total Liabilities and
Shareholders’ Equity |
$ |
14,280,749 |
|
|
$ |
16,769,885 |
|
|
|
|
|
TOMI ENVIRONMENTAL SOLUTIONS, INC. |
CONDENSED CONSOLIDATED STATEMENT OF
OPERATIONS |
(UNAUDITED) |
|
|
For The Three Months Ended |
|
For The Six Months Ended |
|
June 30, |
|
June 30, |
|
2021 |
|
2020 (1) |
|
2021 |
|
2020 (1) |
|
|
|
|
|
|
|
|
Sales, net |
$ |
1,465,525 |
|
|
$ |
10,028,497 |
|
|
$ |
3,538,980 |
|
|
$ |
17,081,915 |
|
Cost of Sales |
|
523,563 |
|
|
|
4,463,602 |
|
|
|
1,361,860 |
|
|
|
7,029,012 |
|
Gross Profit |
|
941,962 |
|
|
|
5,564,895 |
|
|
|
2,177,120 |
|
|
|
10,052,903 |
|
|
|
|
|
|
|
|
|
Operating Expenses: |
|
|
|
|
|
|
|
Professional Fees |
|
106,781 |
|
|
|
54,831 |
|
|
|
280,274 |
|
|
|
190,956 |
|
Depreciation and Amortization |
|
72,413 |
|
|
|
172,298 |
|
|
|
155,861 |
|
|
|
344,207 |
|
Selling Expenses |
|
335,444 |
|
|
|
388,827 |
|
|
|
809,833 |
|
|
|
767,472 |
|
Research and Development |
|
205,751 |
|
|
|
141,123 |
|
|
|
401,371 |
|
|
|
200,581 |
|
Equity Compensation Expense |
|
- |
|
|
|
114,293 |
|
|
|
- |
|
|
|
297,065 |
|
Consulting Fees |
|
95,609 |
|
|
|
69,705 |
|
|
|
201,783 |
|
|
|
151,250 |
|
General and Administrative |
|
1,319,194 |
|
|
|
967,158 |
|
|
|
3,031,560 |
|
|
|
1,785,303 |
|
Total Operating Expenses |
|
2,135,192 |
|
|
|
1,908,235 |
|
|
|
4,880,682 |
|
|
|
3,736,834 |
|
Income (loss) from
Operations |
|
(1,193,230 |
) |
|
|
3,656,660 |
|
|
|
(2,703,562 |
) |
|
|
6,316,069 |
|
|
|
|
|
|
|
|
|
Other Income (Expense): |
|
|
|
|
|
|
|
Gain Upon Debt Extinguishment |
|
414,583 |
|
|
|
- |
|
|
|
414,583 |
|
|
|
- |
|
Interest Income |
|
192 |
|
|
|
1,043 |
|
|
|
619 |
|
|
|
1,585 |
|
Interest Expense |
|
- |
|
|
|
(787 |
) |
|
|
(1,034 |
) |
|
|
(41,476 |
) |
Total Other Income
(Expense) |
|
414,776 |
|
|
|
256 |
|
|
|
414,169 |
|
|
|
(39,891 |
) |
|
|
|
|
|
|
|
|
Income (loss) before income
taxes |
|
(778,454 |
) |
|
|
3,656,916 |
|
|
|
(2,289,394 |
) |
|
|
6,276,178 |
|
Provision for Income
Taxes |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
Net Income (loss) |
$ |
(778,454 |
) |
|
$ |
3,656,916 |
|
|
$ |
(2,289,394 |
) |
|
$ |
6,276,178 |
|
|
|
|
|
|
|
|
|
Net income (loss) Per Common
Share |
|
|
|
|
|
|
|
Basic |
$ |
(0.05 |
) |
|
$ |
0.22 |
|
|
$ |
(0.14 |
) |
|
$ |
0.39 |
|
Diluted |
$ |
(0.05 |
) |
|
$ |
0.20 |
|
|
$ |
(0.14 |
) |
|
$ |
0.35 |
|
|
|
|
|
|
|
|
|
Basic Weighted Average Common
Shares Outstanding |
|
16,811,513 |
|
|
|
16,692,675 |
|
|
|
16,784,737 |
|
|
|
16,271,514 |
|
Diluted Weighted Average
Common Shares Outstanding |
|
16,811,513 |
|
|
|
18,569,760 |
|
|
|
16,784,737 |
|
|
|
18,148,598 |
|
|
(1) |
Share amounts with respect to the common stock and Convertible
Series A Preferred Stock have been retroactively restated to
reflect the reverse split thereof, which was effected as of the
close of business on September 10, 2020. |
|
|
|
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 Six Months Ended |
|
June 30, |
|
June 30, |
|
2021 |
|
2020 |
|
2021 |
|
2020 |
|
(Unaudited) |
|
(Unaudited) |
|
(Unaudited) |
|
(Unaudited) |
Net income (loss) |
$ |
(778,454 |
) |
|
$ |
3,656,916 |
|
|
$ |
(2,289,394 |
) |
|
$ |
6,276,178 |
|
|
|
|
|
|
|
|
|
Interest Income |
|
(192 |
) |
|
|
(1,043 |
) |
|
|
(619 |
) |
|
|
(1,585 |
) |
Interest Expense |
|
- |
|
|
|
787 |
|
|
|
1,034 |
|
|
|
41,476 |
|
Depreciation and Amortization |
|
72,413 |
|
|
|
172,298 |
|
|
|
155,861 |
|
|
|
344,207 |
|
Other |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
EBITDA |
$ |
(706,234 |
) |
|
$ |
3,828,958 |
|
|
$ |
(2,133,118 |
) |
|
$ |
6,660,276 |
|
|
|
|
|
|
|
|
|
Equity Compensation Expense |
|
- |
|
|
|
114,293 |
|
|
|
- |
|
|
|
297,065 |
|
Other |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
Adjusted EBITDA |
$ |
(706,234 |
) |
|
$ |
3,943,251 |
|
|
|
$ (2,133,118 |
) |
|
$ |
6,957,341 |
|
|
|
|
|
|
|
|
|
Net revenue |
$ |
1,465,525 |
|
|
$ |
10,028,497 |
|
|
$ |
3,538,980 |
|
|
$ |
17, 081,915 |
|
Adjusted EBITDA Margin |
|
(48 |
%) |
|
|
39 |
% |
|
|
(60 |
%) |
|
|
41 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
INVESTOR RELATIONS CONTACT:John Nesbett/Jennifer
BelodeauIMS Investor Relationsjnesbett@imsinvestorrelations.com
TOMI Environmental Solut... (NASDAQ:TOMZ)
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TOMI Environmental Solut... (NASDAQ:TOMZ)
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