TOMI Environmental Solutions(TOMZ) - 2022 Q2 - Earnings Call Transcript

Financial Data and Key Metrics Changes - In Q2 2022, TOMI Environmental Solutions closed $5.6 million in orders, representing a 35% growth in sales orders compared to the same period last year [9] - Revenue for the first half of 2022 grew by 6%, with mobile equipment demand increasing by 11% and 13% for the 3 and 6 months ended June 30, 2022 [10] - Operating expenses were reduced by 16% and 21% for the 3 and 6 months ended June 30, 2022, respectively, compared to the same prior year period [11] - Cash used in operations decreased by 82% for the first half of 2022 compared to the same prior year period [11] Business Line Data and Key Metrics Changes - The SteraMist product line saw robust interest, with $4.9 million of overall orders attributable to SteraMist product revenues [12] - The Custom Engineered System (CES) is a primary driver for growth, with ongoing orders and installations expected [8][25] - The company anticipates over $12 million in revenue for 2022, supported by a strong sales pipeline and new product developments [10][40] Market Data and Key Metrics Changes - The global disinfectant spray market is projected to reach USD 18.6 billion by 2030, expanding at a CAGR of 8.2% from 2022 to 2030 [13] - Demand for HAI control products is expected to rise significantly in ambulatory surgical care centers [13] - The company has expanded its customer base to 709 customers in 2022, up from 308 in 2019, indicating substantial growth [33] Company Strategy and Development Direction - TOMI is focusing on expanding its presence in the food safety industry, which is a multibillion-dollar market, and is actively pursuing registrations for direct food applications [17][47] - The company is developing new products and applications to enhance its competitive advantages in the decontamination industry [14][31] - There is a strong emphasis on increasing customer service and sales personnel to support growth and market penetration [66] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving and potentially exceeding the $12 million revenue target for 2022 due to a strong pipeline and product demand [40][41] - The company is optimistic about its competitive position, noting that it does not see competitors winning significant projects [45] - Management highlighted the importance of educating potential customers about the technology to drive adoption and standardization in the market [66] Other Important Information - The company has improved its balance sheet significantly since 2019, with cash balance increasing to $4.8 million from $1.6 million [34] - TOMI has added over 10 new SteraMist products and expanded its IP portfolio with 28 new patents and 115 trademarks since 2019 [33] Q&A Session Summary Question: What gives confidence in achieving the $12 million annual outlook? - Management indicated that they are waiting for purchase orders on 3 and have 8 others in the final approval stages, with expectations for most to be fulfilled in the next two quarters [39][40] Question: Are the pending orders from repeat customers or new customers? - Many orders are from repeat large Fortune 500 pharmaceutical companies, indicating strong customer loyalty and satisfaction [43] Question: What is the outlook for expenses in the next 6 months? - Management noted that while there may be some increase in expenses due to growth, they expect revenue growth to outweigh the additional costs [42] Question: Any updates on the SHIELD study? - The SHIELD study is ongoing, with data being reviewed by independent researchers, and management is awaiting updates [58] Question: Has the relationship with ServiceMaster expanded? - Management indicated that they would need to research the specifics of the ServiceMaster relationship and would provide updates in future calls [60] Question: What plans are in place to increase awareness of the product? - Management is focused on hiring more customer service and sales personnel to enhance outreach and education about the technology [66]