ALUULA Announces Third Quarter 2023 Results and Management Change

Sep 28, 2023 | Financial News

VICTORIA, British Columbia, September 28, 2023 /CNW: ALUULA Composites Inc. (the “Company” or “ALUULA”) (TSXV: AUUA) today announced its financial results for the three-month period ended and nine-month period ended July 31, 2023 (“Q3 2023”). All currency amounts are listed in Canadian dollars.

Q3 2023 Highlights:

  • Completed bought deal and private placement for gross proceeds of approximately $3.6 million.
  • Revenues for the third quarter and year to date 2023 were $2,174,595 and $5,560,303 respectively.
  • Achieved 12% revenue growth over the three-month period ended April 30, 2023.
  • Strong increase in windsport customers – now six customers (ordering at least one kilometer of composite materials) in Q3 2023, compared to two in the same period of the prior year.
  • Built a strong pipeline of new customers and partners in outdoor, aerospace and sailing, which is expected to support transformational revenue growth in these markets in 2024.
  • Launched the new Aeris and Aeris X rolled composite materials.
  • Launched the new AA Glide wing which is the first Windsport product composed entirely from ALUULA composite materials.

“Our focus on large account acquisition in the windsport market saw continued results with the increasing adoption of our composite materials by customers in the quarter. This is providing the validation that ALUULA is the dominant premium brand in the windsport market.” says Richard Myerscough, CEO and director of ALUULA.

“The launch of recycle-ready Aeris and Aeris X to the product line has helped drive strong interest by manufacturers concerned about environmental impact, while still requiring ultralight weight yet strong and durable materials. While the windsport end markets are slower than expected due to post pandemic stock rebalancing, we continue to significantly grow our share of the windsport market and our key relationships in outdoor, aerospace and sailing will translate to strong revenue growth in fiscal 2024. With limited marketing ALUULA is increasingly becoming the composite partner of choice.”

Q3 2023 Financial Results:

Three months ended July 31

Nine months ended July 31
2023 2022 2023 2022
Revenue $ 2,174,595 $ 862,253 $ 5,560,303 $ 2,083,700
Net and Comprehensive Income (loss) $ (533,880) $ (111,575) $ (4,311,176) $ (841,382)
Net income (loss) per share $ – $  – $ (0.03) $ (0.01)
Net income (loss) per share: diluted $ – $  – $ (0.03) $ (0.01)

Q3 2023 revenue grew by 12% over Q2 2023, with prior year comparisons less meaningful given the exclusion of Ocean Rodeo in fiscal 2022. The Company shipped more than thirty-one thousand meters of rolled fabric combined with approximately $1.2 million of kites, wings and accessories sold in the quarter. Six leading windsport manufacturers each purchased more than one thousand meters of fabric in Q3 2023, compared to only two customers purchasing such volumes in the same period of the prior year.

Net and comprehensive loss for the three-month period ended July 31, 2023, increased over the same period of the prior year due to higher freight costs, accounting adjustments connected to the RTO and an increase in staff which were partially offset by larger gross margin generated through the increased sales.

Through the RTO in April 2023 and the bought deal and private placement in July 2023, the Company raised gross proceeds of ~$8 million. The Company used the funds to pay down bank indebtedness, long term debt, and finance leases, and finished the quarter with a cash balance of $2,104,965 which will be used to support operations, fund inventory purchases, and the development of a 1.5-meter production line.

Outlook:

Now in its first year as a public entity, the Company is focused on growing overall windsport revenues across the key customers in this segment. While the windsport end markets are softer than expected with higher than anticipated inventory levels, the Company is pleased to see continued acceptance and penetration within key accounts, now serving the top customers in the segment.

The Company is also pleased with customer engagement across other key vertical markets with strong progress in outdoor, aerospace and sailing and this is expected to translate to strong sales growth in these markets in fiscal 2024.

Product innovation and recyclable material are seen as key attributes for all customers and this is driving new customer adoption.

Management change

The Company also announces that Peter Dorrius has decided to resign as the CFO of the Company with effect from November 10, 2023. Peter will work with the executive team to recruit a replacement. The Board thanks Peter for his contributions and wishes him well.

About ALUULA Composites

ALUULA Composites Inc. (TSX-V: AUUA) is a new class of composite materials built from components with eight times the strength-to-weight ratio of steel, and yet lighter than nylon, polyester or aramid. Using a patented and proprietary approach to increase fiber strength at the molecular level, ALUULA core weaves and outer facing films are fused without the use of heavy glues. This remarkable process allows ALUULA to achieve strength to weight ratio materials that have been previously unachievable. The company continues to add patented innovation to its product offerings and specialized core competencies to its growing team.

Partnering with world-class brands, ALUULA Composites is quickly becoming the top choice for innovators seeking to set a new standard of high-performance.

ALUULA is a Canadian company founded by a team of highly experienced chemists and engineers who share a common passion for exploring and enjoying the outdoors. They have created a new realm in dimensionally stabilized multilayer materials that are the result of an innovative bonding of co-polymer layers, creating composites which are extremely light, highly tear and stretch resistant, and are easily fabricated into a multitude of products across a wide range of markets. ALUULA Composites strives to develop products and processes that are not hazardous to our environment and minimize the footprint we leave behind.

Learn more about ALUULA Composites at: www.aluula.com

Contact:

Richard Myerscough, CEO and Director
ceo@aluula.com

Investor Relations General
investors@aluula.com

TSX Venture Exchange

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

Forward-looking Statements

The information in this news release includes certain information and statements about management’s view of future events, expectations, plans and prospects that constitute forward looking statements. These statements are based upon assumptions that are subject to significant risks and uncertainties. Forward looking statements in this news release include, but are not limited to, the expected future financial position of the Company. Because of these risks and uncertainties and as a result of a variety of factors, including the timing and receipt of all applicable regulatory, corporate and third party approvals, the actual results, expectations, achievements or performance may differ materially from those anticipated and indicated by these forward looking statements. Although the Company believes that the expectations reflected in forward looking statements are reasonable, it can give no assurances that the expectations of any forward-looking statement will prove to be correct. Except as required by law, the Company disclaims any intention and assumes no obligation to update or revise any forward-looking statements to reflect actual results, whether as a result of new information, future events, changes in assumptions, changes in factors affecting such forward-looking statements or otherwise.