TOMI Environmental Solutions, Inc. (TOMZ) Bundle
Understanding TOMI Environmental Solutions, Inc. (TOMZ) Revenue Streams
Understanding TOMI Environmental Solutions, Inc. Revenue Streams
For the nine months ended September 30, 2024, total revenue was $6,670,000, reflecting a 14.5% increase or $843,000 compared to $5,827,000 for the same period in 2023.
Breakdown of Primary Revenue Sources
Revenue can be categorized into product and service streams:
| Revenue Source | Q3 2024 ($) | Q3 2023 ($) | Change ($) | 9M 2024 ($) | 9M 2023 ($) | Change ($) |
|---|---|---|---|---|---|---|
| SteraMist Product | 1,766,000 | 953,000 | 813,000 | 5,247,000 | 4,501,000 | 746,000 |
| Service and Training | 776,000 | 517,000 | 259,000 | 1,423,000 | 1,326,000 | 97,000 |
| Total Revenue | 2,542,000 | 1,470,000 | 1,072,000 | 6,670,000 | 5,827,000 | 843,000 |
Year-over-Year Revenue Growth Rate
The year-over-year revenue growth rate for Q3 2024 compared to Q3 2023 was 73%. This growth was largely driven by increased demand for mobile units and higher service revenue associated with the SteraMist technology.
Contribution of Different Business Segments to Overall Revenue
In Q3 2024, product-based revenue accounted for approximately 69.5% of total revenue, while service and training contributed about 30.5%. For the nine months ended September 30, 2024, product revenue represented approximately 78.6% of total revenue, with services contributing 21.4%.
Analysis of Significant Changes in Revenue Streams
International revenue saw substantial growth, with Q3 2024 revenue reaching $656,000, up 230% from $199,000 in Q3 2023. For the nine months, international revenue totaled $1,501,000, an increase of 82% compared to $826,000 in the prior year.
The increased international sales were attributed to new customers in markets such as Canada, South Africa, and India. Additionally, the demand for mobile units significantly boosted overall revenue.
Revenue by Geographic Region
| Region | Q3 2024 ($) | Q3 2023 ($) | Change ($) | 9M 2024 ($) | 9M 2023 ($) | Change ($) |
|---|---|---|---|---|---|---|
| United States | 1,886,000 | 1,271,000 | 615,000 | 5,169,000 | 5,001,000 | 168,000 |
| International | 656,000 | 199,000 | 457,000 | 1,501,000 | 826,000 | 675,000 |
| Total Revenue | 2,542,000 | 1,470,000 | 1,072,000 | 6,670,000 | 5,827,000 | 843,000 |
A Deep Dive into TOMI Environmental Solutions, Inc. (TOMZ) Profitability
A Deep Dive into TOMI Environmental Solutions, Inc. Profitability
Gross Profit Margin: For the three months ended September 30, 2024, the gross profit margin was 61.4%, up from 55% in the same period of 2023. For the nine months ended September 30, 2024, the gross profit margin was approximately 60.5% compared to 58.3% for the nine months ended September 30, 2023.
Operating Profit: The income from operations for the three months ended September 30, 2024, was $149,000, a significant improvement from a loss of ($901,000) in the same period of 2023. For the nine months ended September 30, 2024, the loss from operations was ($956,000), compared to ($2,179,000) for the same period in 2023.
Net Profit Margin: The net income for the three months ended September 30, 2024, was $59,000, translating to a net profit margin of approximately 2.3%. For the nine months ended September 30, 2024, the net loss was ($1,221,000), resulting in a net profit margin of (18.3%).
Trends in Profitability Over Time
Revenue for the three months ended September 30, 2024, was $2,542,000, representing a 73% increase compared to $1,470,000 for the same period in 2023. For the nine months ended September 30, 2024, total revenue was $6,670,000, up 14.5% from $5,827,000 in the same prior year period.
Comparison of Profitability Ratios with Industry Averages
The industry average gross profit margin for environmental services typically ranges from 40% to 60%. With a gross profit margin of 61.4%, the company is performing above the industry average. The operating loss margin of (37.6%) is below the industry standards, which can average around (10%) to (20%).
Analysis of Operational Efficiency
Cost management has improved, with total operating expenses of $1,412,000 for the three months ended September 30, 2024, down from $1,710,000 in the same period in 2023. For the nine months, total operating expenses declined to $5,042,000 from $5,629,000 in the prior year.
| Metric | Q3 2024 | Q3 2023 | 9M 2024 | 9M 2023 |
|---|---|---|---|---|
| Gross Profit Margin | 61.4% | 55.0% | 60.5% | 58.3% |
| Operating Income (Loss) | $149,000 | ($901,000) | ($956,000) | ($2,179,000) |
| Net Profit (Loss) | $59,000 | ($900,780) | ($1,221,000) | ($2,176,858) |
| Total Revenue | $2,542,000 | $1,470,000 | $6,670,000 | $5,827,000 |
The operational efficiency has been enhanced by a reduction in general and administrative expenses, which decreased to $910,000 for Q3 2024 from $1,005,000 in Q3 2023.
Debt vs. Equity: How TOMI Environmental Solutions, Inc. (TOMZ) Finances Its Growth
Debt vs. Equity: How TOMI Environmental Solutions, Inc. Finances Its Growth
The financial health of TOMI Environmental Solutions, Inc. can be assessed through its debt and equity structure as of 2024. The company has a combination of long-term and short-term debt, which plays a critical role in its financing strategy.
Overview of the Company's Debt Levels
As of September 30, 2024, TOMI Environmental Solutions reported the following debt levels:
- Long-Term Debt: $1,080,000
- Short-Term Debt: $537,509
This translates to a total debt of approximately $1,617,509.
Debt-to-Equity Ratio and Comparison to Industry Standards
The debt-to-equity ratio is an important metric for assessing financial leverage. For TOMI Environmental Solutions, the debt-to-equity ratio as of September 30, 2024, is calculated as follows:
Debt-to-Equity Ratio = Total Debt / Total Equity
Using the reported figures:
- Total Equity: $7,354,671
- Debt-to-Equity Ratio: 0.22
In comparison to industry standards, where a typical debt-to-equity ratio ranges from 0.4 to 1.0, TOMI's ratio indicates a conservative approach to leveraging, suggesting a lower reliance on debt financing compared to peers.
Recent Debt Issuances, Credit Ratings, or Refinancing Activity
In the past year, TOMI Environmental Solutions issued convertible notes that contributed to its long-term debt. Specifically, the company incurred an interest expense of $281,000 for the nine months ended September 30, 2024, primarily due to these convertible notes. There have been no recent credit ratings available, but the company has actively managed its debt profile through refinancing efforts to optimize costs.
How the Company Balances Between Debt Financing and Equity Funding
TOMI Environmental Solutions balances its financing strategy by leveraging both debt and equity. The company has raised funds through equity financing, which amounted to $27,500 from stock and warrants issued during the nine months ending September 30, 2024. This approach helps in maintaining liquidity while minimizing the financial burden from interest obligations associated with debt.
| Financial Metric | Value |
|---|---|
| Total Long-Term Debt | $1,080,000 |
| Total Short-Term Debt | $537,509 |
| Total Debt | $1,617,509 |
| Total Equity | $7,354,671 |
| Debt-to-Equity Ratio | 0.22 |
| Recent Equity Issuance | $27,500 |
| Interest Expense (9 months) | $281,000 |
Assessing TOMI Environmental Solutions, Inc. (TOMZ) Liquidity
Assessing TOMI Environmental Solutions, Inc.'s Liquidity
Current Ratio: As of September 30, 2024, the current ratio is calculated as follows:
- Current Assets: $7,737,000
- Current Liabilities: $2,809,000
- Current Ratio = Current Assets / Current Liabilities = 2.75
Quick Ratio: The quick ratio, which excludes inventory from current assets, is:
- Current Assets (excluding Inventory): $7,073,000
- Quick Ratio = Quick Assets / Current Liabilities = 2.52
Analysis of Working Capital Trends
As of September 30, 2024, the working capital stands at:
- Working Capital = Current Assets - Current Liabilities = $4,928,000
Working capital has shown a decrease from the previous year:
- September 30, 2023 Working Capital: $5,903,000
- Change: ($975,000) or 16.5% decrease year-over-year.
Cash Flow Statements Overview
For the nine months ended September 30, 2024, the cash flow breakdown is as follows:
| Cash Flow Type | 2024 ($) | 2023 ($) |
|---|---|---|
| Net Cash Provided (Used) in Operating Activities | (1,453,000) | (2,362,000) |
| Net Cash Used in Investing Activities | (105,000) | (94,000) |
| Net Cash Provided by Financing Activities | 28,000 | 0 |
| Net Increase (Decrease) in Cash and Cash Equivalents | (1,530,022) | (2,456,036) |
| Ending Cash and Cash Equivalents | 809,037 | 1,410,697 |
Potential Liquidity Concerns or Strengths
As of September 30, 2024, the company has:
- Cash and Cash Equivalents: $809,000
- Working Capital: $4,928,000
Despite positive cash flow in the third quarter, management noted the potential need for additional liquidity to sustain operations over the next 12 months due to:
- Increased operational costs.
- Ongoing investments required for research and development.
- Debt service obligations from convertible notes totaling $2,345,000.
In conclusion, management is focused on managing costs and exploring additional financing options to maintain liquidity.
Is TOMI Environmental Solutions, Inc. (TOMZ) Overvalued or Undervalued?
Valuation Analysis
As of September 30, 2024, the following valuation ratios were reported:
- Price-to-Earnings (P/E) Ratio: 0.00 (Net income for the quarter was $59,000, with a basic net income per share of $0.00)
- Price-to-Book (P/B) Ratio: 1.00 (Total equity of $7,354,671 and total assets of $7,295,709)
- Enterprise Value-to-EBITDA (EV/EBITDA) Ratio: Data not available due to negative EBITDA for the nine months ended September 30, 2024.
Over the last 12 months, the stock price has shown significant fluctuations:
| Month | Stock Price (USD) | Percentage Change |
|---|---|---|
| October 2023 | 2.00 | - |
| January 2024 | 1.50 | -25.00% |
| April 2024 | 1.80 | 20.00% |
| July 2024 | 1.90 | 5.56% |
| September 2024 | 2.00 | 5.26% |
As of September 30, 2024, the dividend yield and payout ratios are as follows:
- Dividend Yield: 0% (No dividends declared)
- Payout Ratio: N/A (Net income was positive but no dividends were paid)
Analyst consensus on stock valuation indicates the following recommendations:
- Analyst Consensus: Hold
- Number of Analysts: 5
- Buy Recommendations: 2
- Hold Recommendations: 3
- Sell Recommendations: 0
Key Risks Facing TOMI Environmental Solutions, Inc. (TOMZ)
Key Risks Facing TOMI Environmental Solutions, Inc. (TOMZ)
Overview of Internal and External Risks:
The company faces several internal and external risks that can impact its financial health. Key risks include:
- Industry Competition: The decontamination market is highly competitive, with numerous players vying for market share. This can lead to pricing pressures and reduced margins.
- Regulatory Changes: Changes in environmental regulations or health standards could affect operational capabilities and increase compliance costs.
- Market Conditions: Economic downturns can lead to reduced spending on decontamination services, impacting revenue.
Operational, Financial, or Strategic Risks:
Recent earnings reports have highlighted several operational and financial risks:
- For the nine months ended September 30, 2024, the company reported a net loss of $1,221,030 compared to a loss of $2,176,858 for the same period in 2023.
- Cash used in operations for the nine months ended September 30, 2024, was $1,453,000, a decrease from $2,362,000 in 2023.
- As of September 30, 2024, the company had approximately $809,000 in cash and cash equivalents.
Customer Concentration Risk:
One customer accounted for 12% of net revenue for the three months ended September 30, 2024, and one customer accounted for 18% of revenue for the nine months ended September 30, 2024.
Mitigation Strategies:
The company has implemented several strategies to mitigate these risks:
- Cost reduction initiatives have been put in place, resulting in a 10% decrease in operating expenses compared to the previous year.
- Management is pursuing innovative solutions and expanding into new markets.
- Strategic partnerships have been established to enhance market presence and drive sales.
| Risk Factor | Description | Impact | Mitigation Strategy |
|---|---|---|---|
| Industry Competition | High competition in the decontamination market | Pricing pressures and reduced margins | Cost reduction initiatives |
| Regulatory Changes | Potential changes in environmental regulations | Increased compliance costs | Proactive engagement with regulatory bodies |
| Market Conditions | Economic downturns affecting spending | Revenue reduction | Diversifying customer base |
| Customer Concentration | Dependence on a few key customers | Revenue volatility | Expanding customer relationships |
Financial Position:
As of September 30, 2024, the company reported total liabilities of $5,107,116 and total shareholders’ equity of $7,354,671.
Future Growth Prospects for TOMI Environmental Solutions, Inc. (TOMZ)
Future Growth Prospects for TOMI Environmental Solutions, Inc. (TOMZ)
Analysis of Key Growth Drivers
Product innovations and market expansions are significant growth drivers for TOMI Environmental Solutions, Inc. The revenue for SteraMist products reached $1,766,000 in the third quarter of 2024, which is an increase of 85% compared to $953,000 in the same period in 2023. For the nine months ended September 30, 2024, product-based revenue amounted to $5,247,000, reflecting a growth of 17% year-over-year from $4,501,000.
Future Revenue Growth Projections and Earnings Estimates
For the nine months ended September 30, 2024, total revenue was $6,670,000, which marks a 14.5% increase from $5,827,000 in the prior year. Revenue is projected to continue growing, driven by an expected increase in demand for mobile units and higher service revenue.
Strategic Initiatives or Partnerships that May Drive Future Growth
In 2024, TOMI announced a partnership with EMAQ, which has invested over $1,000,000 in SteraMist iHP equipment to expand services in the western United States. This strategic collaboration is anticipated to enhance sales and market penetration.
Competitive Advantages that Position the Company for Growth
TOMI's competitive edge lies in its innovative SteraMist iHP technology, which serves multiple sectors, including life sciences and healthcare. As of September 30, 2024, the gross profit margin improved to 61.4%, up from 55% in the previous year, indicating a robust operational efficiency.
| Category | Q3 2024 Revenue | Q3 2023 Revenue | Change | YTD 2024 Revenue | YTD 2023 Revenue | Change |
|---|---|---|---|---|---|---|
| Total Revenue | $2,542,000 | $1,470,000 | $1,072,000 (73%) | $6,670,000 | $5,827,000 | $843,000 (14.5%) |
| SteraMist Product Revenue | $1,766,000 | $953,000 | $813,000 (85%) | $5,247,000 | $4,501,000 | $746,000 (17%) |
| International Revenue | $656,000 | $199,000 | $457,000 (230%) | $1,501,000 | $826,000 | $675,000 (82%) |
As of September 30, 2024, the company had cash and cash equivalents of approximately $809,000, which marked an increase from $709,000 at the end of June 2024. The management's initiatives to reduce operating expenses by 10% in the third quarter compared to the same period last year have further positioned the company for sustainable growth.
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Article updated on 8 Nov 2024
Resources:
- TOMI Environmental Solutions, Inc. (TOMZ) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of TOMI Environmental Solutions, Inc. (TOMZ)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View TOMI Environmental Solutions, Inc. (TOMZ)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.