TOMI Environmental Solutions(TOMZ) - 2025 Q2 - Quarterly Results

Q2 2025 Financial & Operational Overview Financial Performance TOMI's Q2 2025 net sales fell to $1.03 million, leading to a $1.24 million net loss, though gross margin remained strong at 66% Q2 Financial Comparison (Three Months Ended June 30) | Metric | Q2 2025 | Q2 2024 | Change | | :--- | :--- | :--- | :--- | | Sales, net | $1,031,000 | $3,013,000 | -65.8% | | Gross Profit | $677,124 | $1,854,516 | -63.5% | | Gross Margin | 66% | 62% | +4 p.p. | | Operating (Loss) Income | $(1,133,000) | $122,000 | - | | Net (Loss) Income | $(1,238,000) | $30,000 | - | | EPS (basic and diluted) | $(0.06) | $0.00 | - | YTD Financial Comparison (Six Months Ended June 30) | Metric | H1 2025 | H1 2024 | Change | | :--- | :--- | :--- | :--- | | Sales, net | $2,608,000 | $4,127,000 | -36.8% | | Service-based Revenue | $955,000 | $656,000 | +46% | | SteraMist Solution Sales | - | - | +40% | | Operating Loss | $(1,887,000) | $(1,105,000) | +70.8% | | Net Loss | $(1,493,000) | $(1,280,000) | +16.6% | | EPS (basic and diluted) | $(0.07) | $(0.06) | - | - The decline in net sales was primarily attributed to customers deferring capital expenditure projects due to economic uncertainty and the impact of tariffs on their supply chains. This was not a factor in Q2 2024, which had higher sales in mobile equipment and Custom Engineered Systems (CES)[4] Business & Operational Highlights The company saw strong 33% growth in service and training revenue, with a $1.4 million sales backlog and a $4.6 million total pipeline - Service and training revenue showed significant year-over-year growth, increasing 33% in Q2 2025 and 46% in the first half of 2025[4] - The sales order backlog was approximately $1.4 million as of June 30, 2025. The combined total of recognized revenue, deferred revenue, and backlog was approximately $4.6 million as of August 7, 2025[4] - The company was awarded the '2025 Disinfection and Decontamination Products Company of the Year' by MedTech Outlook and announced the first installation of its new SteraMist Integration System (SIS-SA)[4][5] - The company has a total of approximately $15 million in open opportunities for its product offerings, with $7 million designated as high priority[4] Leadership & Liquidity TOMI appointed a new CFO, maintained $2.8 million in working capital, improved operational cash flow, and secured $435 thousand in convertible note financing - In May 2025, David Vanston was appointed as the new Chief Financial Officer[6] - As of June 30, 2025, the company had working capital of $2.8 million, and cash used in operations improved by over $1 million year-over-year for the quarter[7] - A convertible note financing of $435 thousand was successfully completed in H1 2025 to provide additional working capital[7] Management Commentary & Future Outlook CEO Commentary CEO acknowledged softer Q2 product sales but affirmed confidence in growth strategy, highlighting service revenue and margin resilience, with plans for team expansion - The CEO acknowledged a 'softer product sales cycle' in Q2 but remains optimistic about future opportunities and the company's growth strategy[8] - Key areas of encouragement include sustained growth in the service and training division, resilient margins, and progress in broadening the customer base[8] - The company plans to expand its team before year-end, adding talent in the C-suite, sales, customer support, and service technician roles[8] Looking Ahead: Growth Strategy The growth strategy focuses on expanding recurring revenue through service contracts and SteraMist sales, growing international presence, and strengthening the team and balance sheet - The company is executing a focused strategy with the following key pillars: - Expand recurring service contracts and explore new offerings. - Drive recurring revenue growth via SteraMist solution sales. - Grow international presence with targeted marketing. - Pursue additional government and institutional partnerships. - Strengthen the balance sheet and corporate team[13] Consolidated Financial Statements (Unaudited) Condensed Consolidated Balance Sheets Total assets decreased to $8.48 million by June 30, 2025, while liabilities rose to $5.82 million, leading to a decline in shareholders' equity to $2.66 million Balance Sheet Summary (as of June 30, 2025 vs. Dec 31, 2024) | Account | June 30, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | Cash and Cash Equivalents | $569,450 | $664,879 | | Accounts Receivable – net | $1,054,071 | $1,881,138 | | Inventories - net | $3,267,460 | $3,578,202 | | Total Current Assets | $5,402,751 | $6,493,113 | | Total Assets | $8,475,950 | $9,693,738 | | Accounts Payable | $1,001,121 | $1,924,379 | | Total Current Liabilities | $2,593,063 | $2,720,910 | | Total Liabilities | $5,819,120 | $5,594,799 | | Total Shareholders' Equity | $2,656,830 | $4,098,939 | Condensed Consolidated Statements of Operations Q2 2025 saw a $1.24 million net loss on $1.03 million sales, a reversal from Q2 2024 net income, with year-to-date losses widening to $1.49 million Statement of Operations (Three Months Ended June 30) | Metric | 2025 | 2024 | | :--- | :--- | :--- | | Sales, net | $1,031,115 | $3,013,392 | | Gross Profit | $677,124 | $1,854,516 | | Total Operating Expenses | $1,809,813 | $1,732,704 | | Income (loss) from Operations | $(1,132,689) | $121,812 | | Net Income (loss) | $(1,237,516) | $30,198 | Statement of Operations (Six Months Ended June 30) | Metric | 2025 | 2024 | | :--- | :--- | :--- | | Sales, net | $2,607,673 | $4,127,479 | | Gross Profit | $1,628,869 | $2,525,184 | | Total Operating Expenses | $3,516,023 | $3,629,848 | | (Loss) from Operations | $(1,887,154) | $(1,104,664) | | Net (Loss) | $(1,493,109) | $(1,279,992) | About TOMI & Conference Call Information Company Profile TOMI is a global decontamination and infection prevention company, leveraging its DARPA-developed SteraMist® Binary Ionization Technology® (BIT™) for surface disinfection - TOMI is a global decontamination and infection prevention company that provides environmental solutions for indoor surface disinfection[12] - The company's premier technology is the Binary Ionization Technology® (BIT™) platform, which was invented under a defense grant from DARPA[12] - TOMI's products and services are used in diverse settings, including hospitals, medical facilities, cruise ships, schools, and military barracks[14] Conference Call Details A conference call to discuss Q2 2025 financial results is scheduled for August 14, 2025, at 4:30 p.m. ET, with access details provided - A conference call is scheduled for August 14, 2025, at 4:30 p.m. ET[9] - Participants can join via phone by dialing (888) 506-0062 with access code 838858, or access the live webcast through the company's investor relations website[10] - A replay of the call will be available until August 28, 2025[11] Forward-Looking Statements The report contains forward-looking statements subject to risks and uncertainties, with actual results potentially differing materially, as detailed in SEC filings - The report contains forward-looking statements concerning strategies, future revenue, and business development, which are subject to risks and uncertainties as described in the company's SEC filings[17]