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By Anthony Termini, Benzinga
CleanCore Solutions, Inc. (AMEX: ZONE) is an Omaha, Nebraska-based developer of a patented technology that replaces traditional cleaning chemicals with a safe, low-cost solution that infuses water with ozone to produce an effective all-natural alternative.
The company notes that worldwide demand for such products could be nearly $93 billion by 2027. Clayton Adams, CleanCore’s CEO says that the company “is poised to capitalize on this immense opportunity.”
CleanCore Financial Results And Business Update Reveal New Strategy
When CleanCore reported results for the fiscal year ended June 30, 2024, the company noted a shift in its sales strategy. Moving to a direct sales model seems to have been a positive decision.
The change resulted in a nearly 20-point increase in the company’s gross margins, which moved from 29.9% in 2023 to 49.6% in 2024, according to CleanCore’s most recent earnings release.
While not without a minor hiccup, the change may help CleanCore build on its momentum. Moving to a direct sales model has helped the company fill its sales pipeline with record levels of potential order volume. Still, the transition was slightly disruptive to reported revenue.
For the fiscal year ended June 30, 2024, revenue came in at $1.6 million compared to $2.4 million for 2023. Nevertheless, CleanCore believes that the pivot in its selling approach will deliver positive results, and this resulted in a 9% increase in gross profit.
While the company is not yet cash flow positive, CleanCore’s current cash position is almost $2 million. The company reports that that should provide the company with more than two years of runway given its current operating revenues and expenses. Importantly, CleanCore says that it expects to have a positive cash flow within 12 months.
Other Highlights Of CleanCore’s Fiscal Year Report
CleanCore also appears to be trimming expenses while changing its selling tactics. General and administrative expenses decreased by $3.2 million for the year. That represents a better than 56% reduction.
While the company reported a net loss for the year of $2.3 million, this compares favorably to the more than $5 million loss it reported in 2023. The potential for positive earnings may come from the type of wins the company reported in recent months.
CleanCore has delivered products to key B2B growth sectors within its primary target industries. In just the last several months, CleanCore has closed sales with a leading university in the United States, one of the largest airports in the southwestern and one of the world's leading logistics companies.
CleanCore Is Focused On Key Growth Sectors
CleanCore believes that the demand for cleaning products that don’t include harsh chemicals and that are healthier for users, employees, customers and other stakeholders is on the rise among its key target sectors. These include hospitality, healthcare, education, transportation and logistics. Just looking at the healthcare market, Ecolab (NYSE: ECL), a company that provides water treatment, purification and hygiene products to hospitals, forecasts that the population the healthcare system serves will grow by 30% in the next 25 years.
CleanCore provides solutions to hospitals and other healthcare facilities to keep their physical plant clean and to provide unique hygiene solutions in their food service and laundry operations. The company does the same for colleges and universities around the world as well as at airports and commercial buildings.
CleanCore reports that its process is completely natural, so it is simpler, healthier and more sustainable than other disinfectants. Its products eliminate the bacterial odors that often remain after traditional cleaning and that chemical disinfectants try to mask with added fragrance.
Adams points out that CleanCore’s “cutting-edge aqueous ozone cleaning systems are being widely adopted in key sectors, including healthcare, education and aviation, given their ability to eliminate harmful chemicals while maintaining the highest standards of cleanliness.”
He notes that demand for the company’s products also results from their ability to reduce labor costs for customers. “As more industries seek environmentally responsible solutions, CleanCore is at the forefront of this movement, offering technologies that are not only safer but also more cost-effective,” adds Adams.
For more information about CleanCore, please visit CleanCoreSol.com.
Featured photo by pixellicious from Pixabay.
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