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TOMI Environmental Solutions(TOMZ) - 2024 Q1 - Earnings Call Transcript
TOMZTOMI Environmental Solutions(TOMZ)2024-05-16 02:15
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Financial Data and Key Metrics - Consolidated net revenue for Q1 2024 was 1.114billion,downfrom1.114 billion, down from 1.582 million in Q1 2023 [50] - Consolidated gross profit increased to 60.2% from 59.5% due to product mix of sales [50] - Operating loss was 1.226billioncomparedto1.226 billion compared to 1.188 million in the prior year [80] - Net loss was 1.310millionor1.310 million or 0.07 per share, compared to 1.187millionor1.187 million or 0.06 per share [80] - Cash and cash equivalents stood at 1.1millionasofMarch31,2024[68]BusinessLineDataandKeyMetrics−iHPservicerevenueincreasedby211.1 million as of March 31, 2024 [68] Business Line Data and Key Metrics - iHP service revenue increased by 21% in Q1 2024, with significant opportunities resulting in six-figure sales [16][17] - Two CES systems installed in 2022 are now qualified and expected to generate 250,000 in annual solution revenue starting Q4 2024 [45] - The company anticipates 600,000inBITsolutionrevenuefromcurrentCESinstallations[53]−AnewcontractwithaCalifornia−basedlifesciencescompanyforaSteraMistiHP−CESvaluedat600,000 in BIT solution revenue from current CES installations [53] - A new contract with a California-based life sciences company for a SteraMist iHP-CES valued at 600,000 was secured in February [69] Market Data and Key Metrics - The company is exploring opportunities in the biofuel industry, leveraging iHP technology for cellulose conversion [31] - SteraMist technology is being marketed for decontamination in data centers, a sector expected to see 1trillionininfrastructurespendingoverthenextfiveyears[32][7]−Thecompanyisexpandingitspresenceinthefoodsafetymarket,withsignificantinterestindecontaminationapplications[22][77]CompanyStrategyandIndustryCompetition−ThecompanyisfocusedonclosingmoreCESsales,drivingSIStraction,andexpandingiHPCorporateServicerevenues[82]−SignificantadvancementshavebeenmadewithfourdistinctmanufacturingcompaniesforSISproducts[34]−ThecompanyisdevelopinganeducationalplatformforitsTOMIservicenetworktoenhanceroutinedisinfectionpractices[27]ManagementCommentaryonOperatingEnvironmentandFutureOutlook−ManagementexpectssequentialgrowthandreducedlossesinQ22024,aimingforprofitabilitybyQ32024[62]−Thecompanyisactivelypursuingopportunitiesinmultipleverticals,includinglifesciences,pharmaceuticals,anddatacenters[31][32]−TheSteraMistProcertifiedprogramaimstosetindustrybenchmarksfordisinfectionandbiohazardresponse[28][29]OtherImportantInformation−Thecompanyreceiveda1 trillion in infrastructure spending over the next five years [32][7] - The company is expanding its presence in the food safety market, with significant interest in decontamination applications [22][77] Company Strategy and Industry Competition - The company is focused on closing more CES sales, driving SIS traction, and expanding iHP Corporate Service revenues [82] - Significant advancements have been made with four distinct manufacturing companies for SIS products [34] - The company is developing an educational platform for its TOMI service network to enhance routine disinfection practices [27] Management Commentary on Operating Environment and Future Outlook - Management expects sequential growth and reduced losses in Q2 2024, aiming for profitability by Q3 2024 [62] - The company is actively pursuing opportunities in multiple verticals, including life sciences, pharmaceuticals, and data centers [31][32] - The SteraMist Pro certified program aims to set industry benchmarks for disinfection and biohazard response [28][29] Other Important Information - The company received a 2 million allocation from the Department of Homeland Security for 16 SteraMist systems to decontaminate Plum Island, with revenue recognition expected in Q4 2024 [10][64] - A 3 million grant application was submitted to the Department of Defense for mitigating ethylene oxide sterilization [65] - The company is investigating fentanyl testing and has ongoing research with the USDA on food safety and pathogen kill [6][72] Q&A Session Summary Question: Timeline for revenue recognition from the 2 million DHS contract - Revenue recognition is expected in Q4 2024, with decontamination activities scheduled for Q1 or Q2 2025 [10] Question: Growth in the CES business and its impact on the razor/razorblade model - CES customers are consistent users of high-margin BIT solutions, with a strong pipeline in life sciences and pharmaceuticals [12] Question: Current cash position and path to profitability - The current cash position might support profitability, but additional funding is needed to scale the company and capitalize on opportunities [15] Question: Potential government stockpiling of SteraMist for emergency purposes - No specific plans for stockpiling, but the company continues research with the USDA on targeted areas [72] Question: Role of SteraMist in PFOS and PFOA treatment - The company is exploring applications but is limited by its size and focus on multiple verticals [84] Question: Interest in using SteraMist for bird flu prevention - The company is marketing its product for avian flu control, potentially preventing mass culling of birds [1][78]