September 25, 2024 5:41 PM EDT | Source: ALUULA Composites Inc.
Victoria, British Columbia–(Newsfile Corp. – September 25, 2024) – ALUULA Composites Inc. (TSXV: AUUA) (“ALUULA” or the “Company“) today reported its financial results for the three and nine-month periods ended July 31 2024 (“Q3 2024” and “YTD Q3 2024” respectively). All currency amounts are listed in Canadian dollars.
“We are encouraged to see a 43% increase in sales YTD Q3 2024 compared to YTD Q3 2023. While we have remained focused on growing our core windsports business, which reported a 39% increase in sales, with additional brands commercializing kites and wings. We have also directed our resources to establish ALUULA materials in the broader performance outdoor market. These efforts are starting to materialize through sales with incumbent brands, with an increase in sales in our emerging pack and bag market. We have onboarded several new brands in Q3 that have commercialized products, with others coming to market in 2025. It’s promising to see the successful execution of this new focus area,” said Sage Berryman, CEO & President of ALUULA.
The YTD Q3 2024 financial results also show progress in other key verticals for the Company. An example of this is seen in the sailing market with an increase of 181% through the purchase of materials for prototype field testing by industry leading brands.
The Company also reported an increase in sales from the commercial industrial channel as customers within the airship and wind power vertical markets progressed their research and development projects utilizing ALUULA materials. This channel made up 7% of sales in Q3 2024 compared to 1% in Q3 2023.
Key YTD Q3 2024 Highlights
Sales were $4,692,368 YTD Q3 2024 compared to $3,280,490 during the YTD Q3 2023 period, which represents a 43% increase.
This increase was driven by sales growth across various vertical markets within the performance outdoor channel.
The windsport vertical market reported a 39% increase in sales as a growing number of brands commercialized kites and wings featuring ALUULA material.
The pack and bag vertical market reported a 14x increase in sales as customers moved from field testing and prototype production to commercial orders.
The sailing vertical market reported a 181% increase in sales as customers purchased materials to support prototype production and field testing.
Cost of sales increased to $2,741,400 compared to $2,236,347 for YTD Q3 2023.
Gross Margin increased to 42% in YTD Q3 2024 from 32% in YTD Q3 2023.
Net and comprehensive loss from continued operations was $1,467,234 in YTD Q3 2024 compared to $3,105,519 in YTD Q3 2023, representing a decrease of $1,638,285. The YTD Q3 2023 net and comprehensive loss included a one-time listing expense of $1,640,538 related to the Company’s April 2023 reverse takeover transaction. If the listing expense were excluded from YTD Q3 2023 results, the net and comprehensive loss in YTD Q3 2023 would have been consistent with YTD Q3 2024.
Net and comprehensive loss from discontinued operations was $649,307 in YTD Q3 2024 compared to $1,205,657 in YTD Q3 2023. The $556,350 decrease is due to cost control measures put in place to minimize operating losses during the fiscal 2024 year.
Key Q3 2024 Highlights:
Sales were $1,291,938 in Q3 2024 compared to $966,565 during Q3 2023, which represents a 34% quarter over quarter increase.
This increase was driven by sales growth across both key channels, performance outdoor and commercial industrial.
The performance outdoor channel reported a 28% sales increase primarily due to commercial orders from customers within the pack and bag vertical market.
The commercial industrial channel grew to 7% of total sales in Q3 2024 from 1% in Q3 2023 as the Company increased materials sold to customers within the airship and wind power vertical markets.
Cost of Sales in Q3 2024 increased to $804,148compared to $632,082 in Q3 2023.
Gross margin increased to 38% in Q3 2024 from 35% in Q3 2023.
Net loss and comprehensive loss from continued operations was $1,215,139 in Q3 2024 compared to a net and comprehensive loss of $441,786 in Q3 2023 representing a quarter over quarter increase of $773,252. The increase in net and comprehensive loss from continued operations is primarily due to the write-off of accounts receivable, not expected to recur, and inventory adjustments that negatively impacted cost of sales and operating expenses.
Net and comprehensive income from discontinued operations was $91,930 in Q3 2024 compared to a net and comprehensive loss of $92,094 in Q3 2023. The $184,024 quarter over quarter increase to net and comprehensive income was due to a reduction in operating expenses after the decision was made to hibernate operations and the successful collection of aged accounts receivable previously written off as bad debt.
Outlook
The Company continues to work with its growing list of brand partners, developing products that are lighter, stronger, and recycle-ready. These partnerships are built on the mutual understanding that performance and circularity can be synonymous in the outdoor industry and beyond. The products that are born from these partnerships work to change the industry for the better.
The windsports and performance outdoor categories are still the core drivers of ALUULA’s growth as more new companies move from concept into commercialization launching new ALUULA enabled products in these areas. Collaborative research and development programs with other industrial partners, such as Michelin Inflatable Solutions and AirSeas, continue to advance the materials’ development as these opportunities move closer to commercial viability.
Product innovation, strength, weight, and circularity are key areas of focus for ALUULA and its brand partners. ALUULA management believes that focusing on these areas, as well as continued improvements to the patented manufacturing process, will continue to improve efficiencies and profitability. The Company continues to focus on stabilizing the corporate foundation to enable a strong base for future growth.
Financial Statements and Management’s Discussion and Analysis
This earnings press release should be read in conjunction with ALUULA’s interim financial statements for the three and nine months ended July 31, 2024 and the related management discussion & analysis, which can be found on ALUULA’s website and its issuer profile on the System for Electronic Document Analysis and Retrieval Plus at www.sedarplus.ca.
About ALUULA Composites
ALUULA is an ultra-light, high performance and recycle-ready composite materials brand that enhances the performance of outdoor gear. Proudly owned and manufactured on the Canadian west coast, ALUULA’s innovation is driven by a deep understanding that equipment does not need to sacrifice performance for sustainability. ALUULA’s materials are known for their unique construction capabilities and their ability to make products lighter, stronger, and more sustainable.
aluula.com | TSXV: AUUA
On behalf of the Board of Directors,
Sage Berryman
Chief Executive Officer
1-888-724-2470
For ALUULA investor inquiries, please contact:
1-888-724-2470, ext. 4
IR@aluula.com
For ALUULA media relations, please contact:
media@aluula.com
ALUULA’s Brand Partners
The term “brand partners” does not refer to formal partnerships with our customers. The term refers to marketing relationships with our customers who use ALUULA’s technology as a brand ingredient in their products.
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 on assumptions subject to significant risks and uncertainties as described in the Company’s management discussion and analysis. 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 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.
To view the source version of this press release, please visit https://www.newsfilecorp.com/release/224640
SOURCE: ALUULA Composites Inc.
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