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 first quarter 2021.
TOMI Chief Executive Officer, Dr. Halden Shane stated, “Our
first quarter 2021 revenues had a steep comparison to last year’s
first quarter, when the onset of COVID-19 pandemic created an
unprecedented demand in the marketplace for disinfection and
decontamination solutions, including demand for our products. While
the economy has begun to reopen, this year’s first quarter results
reflect headwinds from the impact of many of our customers’
continued remote work environment as well as delays in capital
expenditure projects across our customer base. As a result, it has
been difficult for us to fully implement our strategies to generate
sustained growth following the spike of demand we experienced in
2020. For example, our in-person demos with potential customers
remained suspended in the quarter and many custom engineered
systems (CES) were postponed. That said, we made considerable
progress advancing key building blocks for our long term growth,
including expanding our internal sales force and continuing the
development of three exciting new products. We are particularly
excited about the upcoming launch of our SteraPak product, a much
anticipated offering which further differentiates our 6-log kill
solutions in the marketplace and better position us to continue our
mission to make the world a safer place.”
Dr. Shane continued, “The pandemic accelerated the introduction
of our product to a broader, highly satisfied customer base, many
of whom ordered our hardware and solution quickly at the outset of
the pandemic and are beginning to integrate our solution into their
ongoing disinfection procedures. This pandemic has truly changed
how people think about proactive decontamination and we are
optimistic about our ability to capitalize on that new thinking as
we continue to execute our long term plan to become the standard in
decontamination worldwide. We believe these factors will drive
sustained, higher margin sales at levels above pre-pandemic levels
as more businesses reopen and commercial activities
accelerate.”
Financial Results for the Three Months Ended March 31,
2021 compared to March 31, 2020
- Total net revenue was $2.1 million compared to $7.1 million, a
decrease of 70%.
- SteraMist® equipment-based revenues were $1.7 million and $6.6
million respectively, a decrease of 74%.
- SteraMist® BIT Solution-based revenues were $0.4 million and
$1.0 million, respectively, a decrease of 60%.
- Service-based revenues were $0.4 million for both 2021 and
2020.
- Domestic revenues were $1.8 million and $3.6 million,
respectively, a decrease of 50%; International revenues were
approximately $0.3 million and $3.5 million, respectively, a
decrease of 91%.
- Gross margin was 59.6% compared to 63.6%. The decline in gross
margin is attributable to product mix.
- Operating loss was ($1.5 million) compared to operating income
of $2.7 million.
- Net loss was ($1.5 million) or ($0.09) per basic and diluted
share, compared to net income of $2.6 million or $0.17 per basic
share.
- EBITDA was a loss of ($1.4 million) compared to EBITDA of $2.8
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 ($1.4 million) compared to
Adjusted EBITDA of $3.0 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 March 31, 2021
- Cash and cash equivalents were approximately $3.9 million
compared to $5.2 million at December 31, 2020, a decrease of $1.3
million.
- Working capital was $10.1 million compared to $11.5 million at
December 31, 2020.
- Shareholders’ equity was $11.9 million compared to $13.2
million at December 31, 2020, a decrease of $1.3 million.
Current Business Highlights To Date
- Ongoing development of new products such as SteraBox and
SteraPack, with the latter to have a tentative launch set for mid
year 2021.
- TOMI’s Custom Engineered System (CES ) in Pfizer Missouri was
recently showcased in a New York Times article about Pfizer’s COVID
vaccine processes.
- Added two Vice Presidents of Sales to oversee the Company’s
sales efforts and capitalize on the growing pipeline of
opportunities across the Commercial, Healthcare Divisions.
- The iHP Corporate Service team treated one of four fill lines
in a North Carolina pharmaceutical company that manufacturers one
of the COVID vaccines. The remaining three lines are expected to be
decontaminated at a later date with SteraMist
- An increase in health system purchasing during the first
quarter, including the expansion of sales to a third Mercy hospital
in Ohio, with a fourth Mercy facility expected to implement
SteraMist soon. Zimmer, a medical device company, had multiple
location purchases, demonstrating that referrals from existing
relationships is one of the Company’s highest lead generation
methods.
- TOMI continues to work with premium companies in testing and
validating SteraMist® technology in the Food Safety and seed
industries. In the first quarter of 2021, TOMI increased brand
awareness through promotions and marketing in this division. A
majority of the independent marketing representatives recently
onboarded are part of this division
- In the second half of 2021, as conferences and tradeshows
reopen for in-person exhibition, TOMI’s sales team will attend
these events across the country to perform live demonstrations to
showcase the difference between our SteraMist iHP technology and
our competitors. These in-person conferences and trade shows are a
key component of our marketing strategy.
- The Company continues to work with its German aircraft partner
and Boeing in a third-party test required for the aviation industry
and anticipates the testing will be completed in the second quarter
of 2021. TOMI will incur no expense for this work as both testing
partners are clients.
- TOMI has 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 and strawberry as representative model
foods. TOMI anticipates the pilot will be completed by the second
quarter of 2021.
- TOMI is working with University of Virginia on two separate
studies. The first, which explored SteraMist’s efficacy against
SARS-CoV-2, has 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 has 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 its 1% label to other similar products on the
market.
- TOMI's long term relationship with USDA Agricultural Research
Service continues to progress. In March 2021, "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 first quarter 2021
results at 4:30 p.m. ET today, May 17, 2021.
To participate in the call by phone, dial (877) 545-0320 and
entry code 408875 approximately five minutes prior to the scheduled
start time. International callers please dial (973) 528-0016 and
entry code 408875. 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 May 28,
2021 and may be accessed by dialing (877) 481-4010. International
callers may dial (919) 882-2331. Callers should use replay access
code: 41341 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 |
|
|
|
|
March 31, 2021 |
|
|
Current Assets: |
(Unaudited) |
|
December 31, 2020 |
Cash and Cash Equivalents |
$ |
3,945,658 |
|
|
$ |
5,198,842 |
|
Accounts Receivable - net |
|
3,743,430 |
|
|
|
3,716,701 |
|
Other Receivables |
|
- |
|
|
|
198,951 |
|
Inventories |
|
4,765,455 |
|
|
|
3,781,515 |
|
Vendor Deposits |
|
146,130 |
|
|
|
388,712 |
|
Prepaid Expenses |
|
316,439 |
|
|
|
421,305 |
|
Total Current Assets |
|
12,917,114 |
|
|
|
13,706,027 |
|
|
|
|
|
Property and Equipment –
net |
|
1,235,483 |
|
|
|
1,298,103 |
|
|
|
|
|
Other Assets: |
|
|
|
Intangible Assets – net |
|
720,494 |
|
|
|
722,916 |
|
Operating Lease - Right of Use
Asset |
|
619,989 |
|
|
|
631,527 |
|
Capitalized Software
Development Costs - net |
|
41,902 |
|
|
|
52,377 |
|
Other Assets |
|
516,230 |
|
|
|
358,935 |
|
Total Other Assets |
|
1,898,614 |
|
|
|
1,765,755 |
|
Total Assets |
$ |
16,051,211 |
|
|
$ |
16,769,885 |
|
|
|
|
|
LIABILITIES AND SHAREHOLDERS’ EQUITY |
|
|
|
|
|
|
|
Current Liabilities: |
|
|
|
Accounts Payable |
$ |
2,046,667 |
|
|
$ |
1,501,469 |
|
Accrued Expenses and Other Current Liabilities |
|
629,797 |
|
|
|
501,849 |
|
Customer Deposits |
|
28,949 |
|
|
|
118,880 |
|
Current Portion of Long-Term Operating Lease |
|
83,768 |
|
|
|
81,223 |
|
Total Current Liabilities |
|
2,789,181 |
|
|
|
2,203,421 |
|
|
|
|
|
Long-Term Liabilities: |
|
|
|
Loan Payable |
|
410,700 |
|
|
|
410,700 |
|
Long-Term Operating Lease, Net of Current Portion |
|
931,697 |
|
|
|
953,190 |
|
Total Long-Term Liabilities |
|
1,342,397 |
|
|
|
1,363,890 |
|
Total Liabilities |
|
4,131,577 |
|
|
|
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 March 31, 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 March 31, 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 March 31, 2021 and December 31, 2020, respectively. |
|
168,115 |
|
|
|
167,615 |
|
Additional Paid-In Capital |
|
52,369,899 |
|
|
|
52,142,399 |
|
Accumulated Deficit |
|
(40,619,018 |
) |
|
|
(39,108,078 |
) |
Total Shareholders’ Equity |
|
11,919,634 |
|
|
|
13,202,574 |
|
Total Liabilities and
Shareholders’ Equity |
$ |
16,051,211 |
|
|
$ |
16,769,885 |
|
|
|
|
|
TOMI ENVIRONMENTAL SOLUTIONS, INC. |
CONDENSED CONSOLIDATED STATEMENT OF
OPERATIONS |
(UNAUDITED) |
|
|
|
|
|
For The Three Months Ended |
|
March 31, |
|
2021 |
|
2020 (1) |
|
|
|
|
Sales, net |
$ |
2,073,455 |
|
|
$ |
7,053,418 |
|
Cost of Sales |
|
838,297 |
|
|
|
2,565,410 |
|
Gross Profit |
|
1,235,158 |
|
|
|
4,488,008 |
|
|
|
|
|
Operating Expenses: |
|
|
|
Professional Fees |
|
173,493 |
|
|
|
136,125 |
|
Depreciation and Amortization |
|
83,449 |
|
|
|
171,909 |
|
Selling Expenses |
|
474,389 |
|
|
|
378,645 |
|
Research and Development |
|
195,620 |
|
|
|
59,458 |
|
Equity Compensation Expense |
|
- |
|
|
|
182,772 |
|
Consulting Fees |
|
106,174 |
|
|
|
81,545 |
|
General and Administrative |
|
1,712,366 |
|
|
|
818,145 |
|
Total Operating Expenses |
|
2,745,491 |
|
|
|
1,828,599 |
|
Income (loss) from
Operations |
|
(1,510,333 |
) |
|
|
2,659,409 |
|
|
|
|
|
Other Income (Expense): |
|
|
|
Interest Income |
|
427 |
|
|
|
542 |
|
Interest Expense |
|
(1,035 |
) |
|
|
(40,689 |
) |
Total Other Income
(Expense) |
|
(608 |
) |
|
|
(40,147 |
) |
|
|
|
|
Income (loss) before income
taxes |
|
(1,510,940 |
) |
|
|
2,619,261 |
|
Provision for Income
Taxes |
|
- |
|
|
|
- |
|
Net Income (loss) |
$ |
(1,510,940 |
) |
|
$ |
2,619,261 |
|
|
|
|
|
Net income (loss) Per Common
Share |
|
|
|
Basic |
$ |
(0.09 |
) |
|
$ |
0.17 |
|
Diluted |
$ |
(0.09 |
) |
|
$ |
0.14 |
|
|
|
|
|
Basic Weighted Average Common
Shares Outstanding |
|
16,805,402 |
|
|
|
15,850,352 |
|
Diluted Weighted Average
Common Shares Outstanding |
|
16,805,402 |
|
|
|
18,117,710 |
|
(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 |
|
March 31, |
|
2021 |
|
2020 |
|
(Unaudited) |
|
(Unaudited) |
Net income (loss) |
$ |
(1,510,940 |
) |
|
$ |
2,619,261 |
|
|
|
|
|
Interest Income |
|
(427 |
) |
|
|
(542 |
) |
Interest Expense |
|
1,035 |
|
|
|
40,689 |
|
Depreciation and Amortization |
|
83,449 |
|
|
|
171,909 |
|
Other |
|
- |
|
|
|
- |
|
EBITDA |
$ |
(1,426,883 |
) |
|
$ |
2,831,317 |
|
|
|
|
|
Equity Compensation Expense |
|
- |
|
|
|
182,772 |
|
Adjusted EBITDA |
$ |
(1,426,883 |
) |
|
$ |
3,014,089 |
|
|
|
|
|
Net revenue |
$ |
2,073,455 |
|
|
$ |
7,053,418 |
|
Adjusted EBITDA Margin |
|
(69 |
%) |
|
|
43 |
% |
|
|
|
|
|
|
|
|
INVESTOR RELATIONS CONTACT:
John Nesbett/Jennifer BelodeauIMS Investor
Relationsjnesbett@imsinvestorrelations.com
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