Yahoo Finance TOMI Environmental Solutions Inc (TOMZ) Q1 2024 Earnings Call Transcript Highlights: Navigating ...
Revenue: Q1 2024 reported at $1.1 million, a decrease from $1.582 million in Q1 2023.
Gross Margin: Increased to 60.2% in Q1 2024 from 59.5% in Q1 2023.
Operating Loss: $1.226 million in Q1 2024, slightly up from $1.188 million in Q1 2023.
Net Loss: $1.31 million or $0.07 per share in Q1 2024, compared to $1.187 million or $0.06 per share in Q1 2023.
Cash and Cash Equivalents: Approximately $1.1 million as of March 31, 2024.
Working Capital: $6.6 million as of March 31, 2024.
Shareholder Equity: $7.1 million as of March 31, 2024.
Release Date: May 15, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
TOMI Environmental Solutions Inc reported a 27% increase in sales over the first quarter of 2023, combining sales and backlog.
The company received confirmation from a US-based multinational pharmaceutical customer about the qualification of two CES systems, expected to generate $250,000 in annual solution revenue.
TOMI Environmental Solutions Inc disclosed two groundbreaking studies showcasing the efficacy of their solution against significant viruses, potentially leading to an additional EPA label.
The company was invited to apply for a $3 million grant from the Department of Defense, which could significantly support business growth.
TOMI Environmental Solutions Inc's participation at Interfax 2024 led to numerous quality leads and immediate requests for quotes, indicating strong market interest and potential future sales.
Negative Points
TOMI Environmental Solutions Inc reported disappointing revenue of $1.1 million for the first quarter of 2024, which was below expectations.
The company experienced a consolidated net loss of $1.31 million or $0.07 per basic and diluted share for the first quarter of 2024.
Chief Financial Officer, Nick Jennings, resigned due to personal health and family issues, potentially leading to transitional challenges in the finance department.
The company's cash position appears low, raising concerns about its ability to reach profitability without additional funding.
Revenue recognition from significant contracts, such as the $2 million Department of Homeland Security contract, is expected to be delayed until the end of 2025, impacting short-term financial performance.
Q & A Highlights
Q: It is fitting the question regarding the $2 million allocation from the Department of Homeland Security after the purchase of 16 systems, can you clarify the expected timeline for revenue recognition from the contract, sir? A: Halden Shane, Chairman of the Board, Chief Executive Officer - The budget and purchase order are expected in the fourth quarter of this year, with decontamination planned for the latter end of the first or second quarter of 2025.
Q: Can you provide a bit more color on the growth in the CS business and how that impacts the razor-razorblade model? Are CS customers more dependable and do they depend more on the use of high-margin solutions? A: Halden Shane, Chairman of the Board, Chief Executive Officer - Yes, the CS installations are for major players in life sciences and pharmaceuticals. Although the solution usage isn't as frequent as in hospitals, it's consistent, allowing for predictable future orders. This is a breakthrough for the company with a strong pipeline in life sciences.
Q: The cash position looks low. Is the current cash position of the company enough to get you to profitability? A: Halden Shane, Chairman of the Board, Chief Executive Officer - It might get us to profitability, but additional funding will be needed to seize further opportunities and expand the company.
Q: Are you investigating a bank line of credit or do you already have one? A: Halden Shane, Chairman of the Board, Chief Executive Officer - We are exploring various funding sources, including potentially expanding existing lines of credit.
Q: Can you explain why it took so long for the CES systems delivered in 2022 to start up? A: Halden Shane, Chairman of the Board, Chief Executive Officer - The delay is due to the lengthy qualification and validation processes large companies undertake before these systems can be operational.
Q: Any updates on the potential role of FeraMAX in treating PCOS and P. fours? A: Halden Shane, Chairman of the Board, Chief Executive Officer - While it's a significant issue, our current company size limits our ability to focus extensively on this area. However, we are exploring it as part of our broader initiatives.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
This article first appeared on GuruFocus.
