Press release·04/14/2025 20:32:16

TOMI Sees 5% Revenue Growth in 2024, Expands Global Partnerships and Product Offerings

TOMI Environmental Solutions, a leading provider of disinfection and decontamination solutions, reported strong financial results for the year ended December 31, 2024. The company saw a 5% increase in annual revenue, driven by growing demand for its SteraMist product line and expanded service offerings.

Business Highlights

In 2024, TOMI continued to diversify its product portfolio and secure new partnerships around the world. The company contracted with six new partners across regions like Malaysia, India, Canada, Korea, and the UK, spanning industries such as pharmaceuticals, vivarium, emergency services, and general disinfection.

TOMI also saw significant growth in its iHP Corporate Service division, with customers securing contracts for routine business through 2026. This included onboarding new clients in the food safety sector. To enhance its western U.S. presence, TOMI formed a strategic partnership with EMAQ, which invested over $1 million in SteraMist equipment to expand iHP services in the region.

The company made the decision to open up its TOMI Service Network (TSN) to providers outside of remediation, allowing it to onboard additional partners capable of offering SteraMist technology. A notable example is the collaboration with Triumvirate Environmental, a leader in environmental, health, and safety services.

TOMI also saw strong adoption of its SteraMist technology in the education sector, with Bonneville Joint School District in Idaho integrating the solution into its cleaning protocols. This demonstrates the versatility of the company’s products to serve diverse industries.

To meet market demand for easy-to-use and automated disinfection solutions, TOMI developed new offerings like the Custom Engineered System (CES), Hybrid solutions, and the SteraMist Integrated System (SIS). These products provide customers with a range of options to fit their budgetary and operational needs.

The company also made progress in expanding its partnerships with Original Equipment Manufacturers (OEMs), allowing it to offer a more comprehensive suite of iHP solutions, including enclosures for controlled environments. This is expected to create additional revenue streams for TOMI.

In the food industry, TOMI proactively engaged with key players to demonstrate the capabilities of SteraMist in addressing food safety challenges. The company entered partnerships with several food and beverage manufacturers, including Mayorga Coffee, Organea Terra, Lakeview Farms, and Crank and Boom.

To optimize its marketing efforts, TOMI reduced its participation in trade shows and instead focused on more cost-effective lead generation strategies, such as referrals and references. This approach has proven successful, with existing customers like St. Jude Hospital and an egg manufacturer expanding their SteraMist deployments.

Another significant development was the introduction of the SteraMist Pro Certified (SPC) program, which aims to enhance TOMI’s referral network, promote the utilization of SteraMist products, and educate customers on the benefits of effective disinfection and decontamination.

Financial Performance

For the year ended December 31, 2024, TOMI reported total revenue of $7,739,000, up 5% from $7,355,000 in the prior year. This increase was driven by higher sales of SteraMist products and mobile equipment, as well as growth in the company’s iHP service revenue.

Product-based revenue, which includes SteraMist equipment and accessories, grew to $6,035,000, up from $5,781,000 in 2023. Service and training revenue also increased to $1,704,000, compared to $1,574,000 in the previous year.

Geographically, TOMI’s domestic revenue remained relatively flat at $6,098,000, while international revenue saw a significant increase of $411,000, reaching $1,641,000.

However, the company’s gross profit margin declined to 46% in 2024, compared to 58% in the prior year. This was primarily due to a $1,005,000 adjustment to the company’s inventory reserve to account for slower-moving items. Excluding this adjustment, TOMI’s gross margins were consistent with the previous year.

Operating expenses increased slightly to $7,662,000, up from $7,639,000 in 2023. This was driven by higher general and administrative expenses, which included a $959,000 charge for an increase in the company’s reserve for expected credit losses.

TOMI’s net loss for the year ended December 31, 2024, was $4,477,000, compared to a net loss of $3,402,000 in the prior year. The increased loss was primarily attributable to the higher operating expenses and interest expense related to the company’s convertible notes.

Liquidity and Capital Resources

As of December 31, 2024, TOMI had cash and cash equivalents of $665,000 and working capital of $3,772,000. The company used $1,440,000 in cash from operations during the year, a significant improvement from the $3,599,000 used in 2023.

To address its liquidity needs, TOMI has taken several actions, including expanding its EPA product registrations, growing its internal sales force and manufacturer representatives, continuing research and development, and sourcing alternative lower-cost suppliers.

The company also entered into a securities purchase agreement in November 2023, which allowed it to issue up to $5 million in convertible notes. As of the end of 2024, TOMI had issued $2.6 million in convertible notes, with an additional $385,000 issued in early 2025.

Despite these efforts, TOMI’s net losses and cash used in operations have raised substantial doubt about the company’s ability to continue as a going concern within the next 12 months. Management remains committed to pursuing various financing options, such as equity and debt offerings, to support the company’s operations and growth initiatives.

Outlook and Strategic Priorities

Looking ahead, TOMI is focused on several key strategic priorities to drive future growth and profitability:

1. Expanding EPA and Global Registrations: The company is actively working to expand its product registrations with the EPA and internationally, which will enable it to further penetrate global markets and capitalize on growing demand for its disinfection solutions.

2. Strengthening Sales and Distribution: TOMI is committed to expanding its internal sales force and manufacturer representatives to drive revenue growth across all its verticals. The company also plans to continue leveraging strategic partnerships and referrals to expand its customer base.

3. Advancing Product Innovation: The company will continue to invest in research and development to enhance its “Stera” product line and introduce new solutions that address evolving market needs, such as the integration of its SteraMist technology into enclosures and controlled environments.

4. Improving Operational Efficiency: TOMI is implementing cost-reduction measures, including sourcing alternative suppliers and optimizing its consulting and overhead expenses, to improve its profitability and cash flow.

5. Diversifying Revenue Streams: The company is focused on expanding its recurring revenue streams, such as service contracts and BIT Solution sales, to complement its equipment sales and create a more stable and predictable revenue model.

By executing on these strategic priorities, TOMI aims to strengthen its market position, increase its profitability, and enhance its long-term sustainability. The company’s innovative disinfection solutions, global partnerships, and commitment to research and development position it well to capitalize on the growing demand for effective, environmentally friendly decontamination technologies.

Conclusion

TOMI’s 2024 financial results demonstrate the company’s ability to navigate a challenging operating environment and continue expanding its global footprint. Despite the net loss and liquidity concerns, the company’s focus on product innovation, strategic partnerships, and operational efficiency improvements position it for potential future growth and profitability.

As TOMI continues to execute on its strategic priorities, investors will be closely watching the company’s ability to convert its strong market position and technological advantages into sustainable financial performance. The successful integration of its SteraMist solutions into new markets and the continued expansion of its recurring revenue streams will be key to TOMI’s long-term success.