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The information provided in this conference call is based upon the facts and circumstances known at this time. The company undertakes no obligation to update these forward looking statements after the date of this call. I will now turn the call over to TOMI's CEO and Chairman of the Board Doctor. Haldon Shain. Thank you, Rosalind.
11m 57s
And good afternoon.
11m 58s
Everyone, and thank you for joining the TOMI Environmental Earning Call. In this update, we will highlight the key developments since our recent report which wasn't very long ago. On the twenty twenty four figures. Shared less than a month ago, we're excited to share that TOMI is making remarkable progress and is firmly committed to achieving success in 2025 as reflected by the numbers reported for the first quarter. I will also outline our plans for the remainder of the year We are moving through the year with considerably stronger product line and distribution strategy. We have new and diverse service offerings we launched in 2024. Along with our innovative product line, the SIS dash SA Additionally, our recent collaborations with partners like PBSC announced on 03/25/2025 enable us to deliver customized IHP enclosures, chambers, and hatches directly to our customers. In quarter one of twenty twenty five, we achieved a 42% increase in total sales compared to quarter one of twenty twenty four. With the upswing continuing into quarter two, the month of April has reflected a 21% increase in sales when compared to the same month last year. And year to date, we've experienced a 169% surge in bit solution sales compared to the same period last year.
13m 56s
That is in the back of a 97% increase of solution sales for the February compared to 02/2024. We are optimistic about sustaining this momentum with a dedicated focus on our SteraMist integrated system the SIS offerings, along with exciting new initiatives for our custom engine system. To further sustain growth in our consumable bit solution sales, we will continue to expand our customer outreach through targeted marketing initiatives and strategic partnerships. Additionally, we are committed to educating the market on crucial importance of protective disinfection through SteraMist Pro certified program. In quarter one, we saw a significant increase in the use our handheld devices. We welcomed several new customers, including a new division of the US Army, A children's hospital in Philadelphia, additional research universities, and quality service providers. The use starting this is expanding within the egg white manufacturing company I referred and referenced during our last call. This company has also established itself as a vulnerable valuable, referral source to us in the food industry, and has provided us with essential procedures and protocols enhancing our expertise in this segment. Notably, our partnership with AlgaeFeed which successfully tested slight contamination has opened a new aquaculture market for SteraMist IHP.
15m 59s
In quarter one, of our international distributors also added SteraMist products to their customer base. A major highlight this quarter was the purchase of both surface units and stainless steel carts by an American Canadian eye health company. Valued at approximately $170,000. We are currently collaborating with them and their qualification procedures as they also acquired our validation service package. Which we expect to complete in quarter two. We also expect this health product company to purchase a similar order for a separate location in the short term. We continue our work with a major corporation focused on decontaminating heart monitoring devices. This order valued at approximately 288,000 was received in quarter one with further committed orders in the amount of 45,000 to the project since our last call. We are currently in the manufacturing phase of the enclosures. Validation service related to this order is expected to be conducted in quarter three of this year. It's important to highlight at the end of 2024, we had an open sales log of 877,000. By the end of quarter one, or March thirty first of this year, that figure has risen to 1,200,000. And is currently stands at 1,600,000. This increased backlog is not only from our IHP corporate service plans, but it's also a result of our expanded new service offerings that complement capital equipment purchases.
18m 7s
This includes our new product, offering in collaboration with partners for made to order IH enclosure equipment. And the wins of long term project bids for our custom engineered system, known as the CES. I will now provide a brief overview of our financial results for the first quarter of twenty twenty five compared to the same period last year. Revenue increased to 1,577,000 for the February, which was up from 1,114,000 in the first quarter of twenty twenty four, representing a 42% increase in sales driven by heightened demand for a bit solution, mobile systems, SIS and increased revenue from IHP corporate services. Our product based revenues totaled $1,000,000 in Q1 of twenty twenty five, reflecting 35% growth compared to Q1 of twenty twenty four. Our service revenues generated 577,000, a 56% increase from the same prior year period. [indiscernible] reached approximately $300,000 marking nearly a 200% increase from just over a 100,000 in the first quarter of last year. Additionally, technical support for existing customers' equipment continued to see a notable increase at 42% indicating that our clients are utilizing our equipment more frequently for their registered operations. Our gross margin as a percentage of sales for the three months ended 03/31/2025 was 60.4%.
20m 17s
Compared to 60.2% in the same prior year period. Operating loss for the quarter was approximately 7 and 54,000, an improvement from the operating loss of 1,226,000 in the same quarter last year. Our net loss was approximately $256,000 for 0.01 per basis and diluted share compared to 1,310,000 or 7¢ loss per basic and diluted share in the prior year. That's really good. As of 03/31/2025, our financial position consists of cash and cash equivalent of approximately 674,000. Working capital of 3,800,000.0 and shareholder equity of 3,800,000.0. We are very focused on prudently managing our working capital We have made progress on our accounts payable, the particularly subsequent to the close of the quarter. Our accounts payable stands at approximately 700,000. Lower than the 1,700,000.0 reported for quarter one two thousand and twenty five, which puts us in a good position to exit quarter two with similar cash positions to quarter one. As mentioned, we anticipate a positive trend in sales throughout the year, for BIT solution, equipment services and custom designs. Quarter two has begun on a strong note. Highlighted by other significant wins for our SIS platform, totaling over 180,000 for a university. Further device purchases by our egg white manufacturer [indiscernible] and the USDA's increased usage of SteriMist.
22m 29s
Additionally, we have a promising opportunity with a service provider franchise. In quarter one, we welcome one group from Middle Tennessee Followed by two additional providers from this franchise this current quarter. While still in the early stages of development, we are scheduled to meet with franchise teams next week regarding our SteraPak. We will keep you updated on these developments but it's encouraging to see that our targeted marketing initiatives and strategic partnerships are beginning to yield results. With the recent launch of the SIS platform, the arrangement of our custom systems can become a bit complex. To ensure everyone is on the same page, I would like to take this opportunity to clarify our status regarding the three offerings that can be classified as custom, or made to order. To some extent. The custom engineered system or CES the hybrid and the SteriMist Integrated System or SIS. We currently have eight eight active fully operational custom engineered systems, including the previously announced two systems for Merck. And we anticipate their BIT solution orders in the second half of year. Additionally, we are in negotiations to install the hybrid at another building on the Merck campus. With an estimated value of approximately $300,000 Although the timeline for implementation is still being determined.
24m 26s
We are at various stages with four purchase bids for CES systems either already accounted for in revenue or in open bookings. Regarding the full pipeline reported during our last call, we are actively negotiating $2,000,000 among five potential orders for RCES. We are routinely discussing specific Specifications with these five and are highly optimistic about securing these wins. The hybrid currently include two fully installed and operational units. Our initial hybrid previously referred to as a modified environment system has been in use for the past three years. And this consistently purchases approximately $50 worth of its solution annually. The second system is getting started, while the theory is in the final stages of internal approval. We are actively engaging with seven different opportunities for the hybrid each with varying timelines. It's important to note that this product offering is dependent on and frequently changes during the negotiation process. Otherwise, these companies would likely opt for our CES As such, it is challenging to provide a precise estimate for the expected outcomes for some of these set and opportunities. The current bids range from approximately $150,000 to $800,000 The SIS platform can be complex as it may involve a combination of efforts with the new partners we've discussed over past few quarters.
26m 27s
These could entail providing a fully enclosed system utilizing our technology or simply the purchase of our capital mobile equipment equipment. The SIS, SA along with accompanied services, we now provide.
26m 45s
Currently, we have two installed and operational SIS systems with one more awaiting completion of our customers internal processes. Estimated for completion by the end of the year. Additionally, we have five systems pending either waiting for enclosures to be manufactured or for services from TOMI to be scheduled according to customer timelines. The pipeline for SIS and SIS SA has shown substantial potential since its recent launch. Although still early to provide concrete numbers with confidence, the five already accounted for. In either sale backlogs of point to approximately 9 and $50,000. TOMI anticipates this to be a game changer for our brand, keeping pace with industry advancements. Our ongoing communication with enclosure manufacturers manufacturing companies worldwide reinforces this optimism. We look forward to sharing more formal facts as the year progresses, with even greater developments in in 2026. The brief updates just from the past month include the ongoing expansion of Fresenius Kabi across various locations, which I anticipate will be officially announced shortly. We are diligently working on enhancing our sales infrastructure by establishing new distribution channels, recruiting independent representatives, and most importantly, bringing in qualified business developers to effectively manage our growing customer base and support new sales initiatives.
28m 34s
These efforts are expected to positively impact our revenue 2025 and beyond. Additionally, we are actively seeking strong global partners to 2025 and continuing our discussions with those mentioned during the last call. Our focus remains on rebuilding our brand presence in Panama, Nigeria and Israel with new partnerships. As well as establishing a new relationship in Australia, and Chile and adding distributors in Costa Rica and Brazil. We will continue to capitalize on positive momentum in IHP corporate service deployment, which has generated 633,000 for the year, from deployment service jobs alone. The IHP corporate service deployment pipeline currently stands at $1,000,000 in open proposals for 2025. We are excited to announce that we hope to finalize a new partnership with a company we recently engaged with for the first time in quarter three of last year. This partnership would involve contracting the TOMI, IH corporate service team, for two separate buildings, servicing them twice a year and has the potential to make them our highest service customer. Our first service under this arrangement is expected at the May followed by the second service in July. We anticipate finalizing our arrangement with discuss customer and commencing services at the end of the current quarter.
30m 24s
In summary, we are encouraged by significant progress TOMI has made in the first quarter of twenty twenty five with substantial increases in total sales, and BIP solution sales that showcase the effectiveness of our strategies and product offering. Our ongoing efforts to enhance our sales infrastructure, expand our distribution channels, and establish strategic partnership positions us well for continued growth through the year. As we look ahead, we remain committed to advancing the innovations of our SIS platform and custom engineered systems and offer to our impressive customer base and new customers, while also strengthening our presence in key and new markets. As always, we thank all of you for your continued support and belief in TOMI. Know it's been a long road, but together, and as always, we will embrace the opportunities that lie ahead and we look forward to sharing our successes with you in coming quarters. Operator, let's open the call to questions.
31m 49s
Certainly. At this time, we will be conducting a question and answer session. If you would like to ask a question, please press 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press 2 if you would like to remove your question from the queue. For participants using speaker equipment, it may be to pick up your handset before pressing the star keys. One moment please while we poll for questions. Your first question for today is from John Nelson a private investor.
32m 27s
Hi.
32m 29s
Great job on the quarter.
32m 32s
Thanks very much as a shareholder. And it sounds like you're making tremendous progress [indiscernible] the future looks bright. So I've got a couple of questions. First first one is, do you have any financial goals for the year 2025 that you can share with us? We know that 2025 is gonna be a great year, John. We're trying not to go forward and project [indiscernible] we're pretty confident that we're gonna improve on our last year in numbers. Okay. Good. And anything do you anticipate any effects from the tariffs trade policy Well, you know, it's it's hard to tell Basically, it's changing daily. We had one minor of problem with South Korea where they had a 15% tariff and our distributor got back to us and, you know, wanted to split that with us [indiscernible] I'm not sure if we we made a decision yet. But you know, we'll work with them. We're not having any problems with international sales. Because of the tariffs. And I certainly hope that, and today was a very encouraging day. That a lot of this stuff will come to an end shortly or within the next sixty days. Okay. And then, with the government's recent budget and staff cuts.
34m 38s
At various agencies Do you anticipate that being of any significant problems for TOMI? No. Not at all. In fact, I think we're seeing an increase in the right aspects of the government that utilize our product. There would be doing a lot more critical testing and studies on everything. And I think that it should be this should be good for us, in relationship to filling the government's needs. And I think that they definitely need our product in all aspects of government for the best disinfection decontamination. But from the lab standpoint, I see things increasing this year. Okay. And I ask these questions every quarter, just because I know that they could open up significant new markets for TOMI over the long run. Anything new on food safety?
35m 59s
We have we're getting flooded with interest and requests for you know, quotes and, in all aspects of and our companies, as I mentioned, are very large. And, they seem to like our product and are using it and I truly believe, that food safety will surpass life sciences, in time. And, we're even getting requests from researchers at universities that want to use our product, and test it for food safety in various areas, you know, specific, you know, further than what I mentioned on the call.
36m 48s
Okay, has anything materialized as far as far as either number of requests or progress on the use of, SteraMist for prevention of bird bird flu. [indiscernible] Nothing that I'm recently aware of. I mean, we do have remediators and professional cleaners that are using our product. For that. But, you know, governments you know, there I believe treating it just as a flu and not overcompensating for it, which you know, is fine. But, there's an increase in individuals that wanna use it for disinfection decontamination for the treatment of bird flu and other related viruses.
37m 50s
Okay. And then, anything anything any new developments on as an ethylene oxide replacement?
38m 11s
We have and we are in talks with companies that would replace ethylene oxide with Ceramist and they are we are negotiating in those space.
38m 28s
Was the, the order that you got for treating pacemakers by the medical device manufacturer, was that used in replacement of ethylene oxide? Or just for a ethylene. Another layer?
38m 47s
Oh, look. You said do you know the answer to that? [indiscernible] that one company is using us for disinfecting their heart monitoring devices. What was stated is we think it will be a good foot in the door to work on our five ten to get fully registered as a medical device. Disinfection product. And so, encompassing IHP into a full enclosed chamber will lead to an easier way in to replace ethylene oxide. So with time, I absolutely do think so. That one particular win was not in replacement. We actually helped them develop an entire new protocol for their use. [indiscernible] Okay.
39m 37s
And then you had mentioned again, it's critical that, TOMI continues to educate the market with information about your superior product. Is there have you developed, any new ways to try to educate the market or to spread the word? [indiscernible] Yes, of course. We did. We launched the that's what the SteraMist Pro certified program is all about, not to have it just be for our service providers, but our entire customer base.
40m 21s
And our distributors and their representatives as well. [indiscernible] on a learning management system, has ongoing training. Protocol developments regardless of the segment or industry they find themselves in. And we update it routinely and weekly, so it creates more of a education platform and communication outlet to really get involved in using SteraMist and getting out there. So it is newly developed. We have moved pretty quickly on it. I expect real results coming from it in terms of the amount of users come next year. But it has shown already some results especially around usage of the technology. And different segments.
41m 9s
Okay.
41m 10s
And is the [indiscernible] didn't I wasn't sure if I caught it right, but is the SIS system being used by the heart monitor company to, treat devices. Or is that a another, form of hybrid or CES.
41m 37s
No, you're absolutely right. It's the SIS standalone. So they did purchase the Capital Mobile piece of equipment, will integrate within the chamber that we're designing with our partners.
41m 50s
Okay. And it might be useful to the shareholders and listeners just to describe how the SIS actually works you know, as far as, sterilizing equipment like the heart monitors. Not just a assuming it's not just a stick it in the container and push the button, and that's it?
42m 25s
It it is, actually. It's it's be very similar to our environment system. So the key aspect to the technology is it all runs off the same science.
42m 36s
So in essence, it's just the amount of applicators that they would require. The stand alone sells the applicators, which houses the cold plasma arcs the basis of our technology. Separately because they can use it elsewhere within the facility. So trying to promote more use out of machines. Where they can connect it to the enclosure, and then also use it on a handheld spray should they want So, it is all encompassing. The unit itself is very similar to our building. But only houses one applicator, so for smaller areas.
43m 14s
Okay. And, and this is just me speculating, but is there a use or need for something like this in [indiscernible] Yes.
43m 38s
I do believe there would be. We have our we sell two of our Stera Box which is something we're marketing towards hospitals with the standalone.
43m 48s
It's a new initiative, but it's getting put out there. But, yes, it would be a good unit for her.
43m 55s
Alright. Good. Well, that's all of my questions. Thanks very much. Good job, Bye. Great job by the, by the whole team. Thank you. [indiscernible] Thank you. Thank you for your support.
44m 15s
Your next question is from Jeff Visalli Visalli Capital.
44m 21s
Hey guys, thanks for taking the question. Just a quick one here. Solution sales, they've pretty strong as of late. Can we just provide a bit more color there?
44m 29s
Kind of background on what's driving that? Sure. So in the model itself has always been the razor razor blade model where we get technology out being the razor, and we sell a lot of razor blades. And, you know, it's taken a while to get the razors in the hands of the right people that constantly use razors. And we have recently gotten large orders from people that are currently using our products more. And we anticipate this to increase going fully in the year to come. So, you know, we're very, very thrilled about the usage and about the increase in solutions And, you know, we're we're just constantly working selling more razors out there, more technology. So they can utilize more of our solution or blades. Got it. Great. Thank you very much. That's all for me. Sure. Sure.
45m 47s
Once again, if you would like to ask a question, please press 1. We have reached the end of the question and answer session, and I will now turn the call over to Doctor. Shane for closing remarks.
46m 12s
Well, I wanna thank you both for joining us today wherever you might be in the world and, look forward to presenting our next quarter results. And look forward to a great year at TOMI. And I hope everybody has a wonderful day. And I wanna thank my TOMI team for all the hard work that they've done. Thank you.
46m 39s
Thank you. This concludes today's conference, and you may disconnect your lines at this time. Thank you for your participation.
Key Insights
TOMI reported a 42% increase in total sales for Q1 2025 compared to Q1 2024, with product-based revenues up 35% and service revenues up 56% year-over-year; gross margin remained strong at 60.4%.
The company experienced a 169% year-to-date surge in BIT solution sales and a 97% increase in solution sales for February 2025 versus the prior year, driven by increased usage among new and existing customers.
TOMI’s sales backlog grew from $877,000 at the end of 2024 to $1.6 million by the current date, reflecting expanded service offerings and new product collaborations, including custom engineered systems (CES) and the SteraMist Integrated System (SIS).
Operating loss improved to $754,000 in Q1 2025 from $1.23 million in Q1 2024, with net loss narrowing to $256,000 ($0.01 per share) from $1.31 million ($0.07 per share) the previous year; cash and equivalents stood at $674,000 with working capital and shareholder equity at $3.8 million each.
Management anticipates continued sales growth throughout 2025, citing strong momentum in BIT solution, equipment, and service sales, ongoing expansion into new markets (including food safety and international regions), and a robust pipeline of custom system bids totaling approximately $2 million among five potential orders.
