• Revenue: $3.013 million, a 9% increase from $2.775 million in the prior year.
• Gross Profit: 61.5%, up from 61.3% in the previous year.
• Operating Profit: $121,000, compared to an $89,000 loss in the prior year.
• Net Profit: $30,000, compared to a net loss of $89,000 in the previous year.
• Cash and Cash Equivalents: Approximately $709,000 as of June 30, 2024.
• Working Capital: $6.8 million.
• Shareholders' Equity: $7.3 million.
• Mobile Equipment Revenue: Over 60% of total revenue.
• BIT Solutions Sales: Increased by approximately 171% over the first quarter.
• Year-to-Date Sales: Approximately $5.6 million.
• iHP Service Revenue: Almost $1 million year-to-date.
• EMAQ Partnership: Contributed $1 million in sales for Q2 and will generate approximately $60,000 in annual BIT Solution sales.

• Warning! GuruFocus has detected 4 Warning Signs with TOMZ.

Release Date: August 01, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• TOMI Environmental Solutions Inc (NASDAQ:TOMZ) returned to profitability in Q2 2024, marking a significant milestone for the company.
• Revenue for the quarter exceeded $3 million, representing a 170% sequential increase compared to the previous quarter.
• BIT Solutions sales increased by approximately 171% over the first quarter, contributing to strong financial performance.
• The company has secured approximately $5.6 million in sales year-to-date, indicating strong future growth potential.
• TOMI expanded its global footprint with new customers in Canada, Mexico, Philippines, and the UAE, enhancing its market presence.

Negative Points

• The company experienced a significant increase in accounts receivable, raising concerns about cash flow and collection efficiency.
• Despite the return to profitability, the company's historical results have been described as 'lumpy,' indicating potential volatility in future earnings.
• The company did not secure a DoD grant for the ethylene oxide market, which could have provided additional funding and opportunities.
• There is a need for more awareness and understanding of TOMI's products in certain markets, such as data centers, which may slow adoption.
• The company faces challenges in penetrating certain markets, such as the ambulance market, which requires long-term processes and education.

Q & A Highlights

Q: How do you manage visibility and inventory for mobile equipment sales? A: (Elissa Shane, COO) Mobile equipment sales are typically immediate delivery. Orders come in, and we deliver them immediately. We maintain an inventory of over $4 million, mostly composed of mobile equipment.

Q: Is there a particular segment within the food safety industry where you see faster adoption of your products? A: (Halden Shane, CEO) All segments are in play, from grocery markets to transportation and storage of produce. The demand is increasing due to the high cost of food, emphasizing the need for preservation and safety.

Q: With the current sales pipeline, should we expect sequential improvements for the remainder of 2024? A: (Halden Shane, CEO) We are encouraged by our pipeline and projects, especially custom units. We anticipate a strong second half of the year and continued growth into 2025 and 2026.

Q: Has the bird flu increased awareness and visibility of your products in the industry? A: (Halden Shane, CEO) Industry professionals are becoming more aware, and we are receiving more inquiries. The bird flu's impact on other animals could potentially increase product usage in the right situations.

Q: Can you elaborate on the growth in BIT Solutions sales and its impact on your business model? A: (Halden Shane, CEO) Our model is akin to razor/razor blade. The more equipment we deploy, the more BIT Solutions are used, which are high-margin products. This will enhance profitability as equipment utilization increases.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.