Victoria, British Columbia--(Newsfile Corp. - February 10, 2025) - ALUULA Composites Inc. (TSXV: AUUA) ("ALUULA" or the "Company") today reported its financial results for the three and twelve month periods ended October 31, 2024 ("Q4 2024" and "FY 2024" respectively). All currency amounts noted are in Canadian dollars.
Fiscal 2024 marked a year of change for the Company. ALUULA welcomed a new President, Sage Berryman, in February 2024 and in May 2024, announced a strategic refocus plan (the "Plan") aimed at allocating the Company's resources to areas with the highest growth potential.
Throughout the second half of FY 2024, ALUULA actioned the Plan. The Company diversified its sales pipeline across new products and vertical markets, focused on gross margin efficiency, divested non-core assets and restructured the team to support evolution and continued growth. The Q4 2024 and FY 2024 results underscore the Company's success in achieving the Plan.
"This fiscal year has been pivotal for ALUULA - a year of stabilization and growth. Through focused efforts to strengthen our foundation, we achieved a 53% year over year sales growth, more than doubled the number of commercialized customers, improved gross margins from 30% to 41% and generated over half a million dollars from the sale of non-core assets.
We've built a strong team of experts who have worked closely with our growing customer base to push the boundaries of what's possible with ALUULA. The team is starting fiscal 2025 with momentum, energized by our growth and ready to continue evolving and disrupting the materials science industry" said Sage Berryman, President and CEO of ALUULA.
The Company recently announced the successful completion of an oversubscribed rights offering for gross proceeds of $2,506,156. Proceeds from the rights offering will be used to support fiscal 2025 initiatives including, but not limited to, continued customer acquisition, the purchase of R&D and production equipment, the investigation of alternative methods of manufacturing, and general working capital.
Key Q4 Highlights
- Sales for Q4 2024 were $1,666,861 compared to $881,196 during Q4 2023, which represents an 89% quarter over quarter increase.
- ALUULA continued to gain momentum in the Performance Outdoor channel reporting a sales increase of $656,083 or 85% in Q4 2024 compared to Q4 2023.
- Approximately 55% of this increase is attributable to the windsport vertical.
- The remaining 45% is attributable to sales orders shipped within the bag and pack vertical market where ALUULA manufactured commercial scale orders from three customers in Q4 2024.
- The Company continued to build its Commercial Industrial channel and had nine prospects at various sales cycle stages during Q4 2024 compared to two in Q4 2023.
- Cost of Sales in Q4 2024 increased to $1,015,256 compared to $657,466 in Q4 2023.
- Gross Margins increased to 39% in Q4 2024 from 25% in Q4 2023. Q4 2024 gross margin was slightly lower than the Company's expected range of 40-45% due to a year-end inventory adjustment. If this adjustment were excluded, gross margins for Q4 2024 would have been 42%.
- Other income reported as part of discontinued operations includes a net gain of $173,108 on the sale of certain non-core business assets.
- Net and comprehensive loss from Ocean Rodeo's discontinued operations was $653,283 in Q4 2024 compared to a net and comprehensive loss of $316,954 in Q4 2023. The quarter over quarter increase to net and comprehensive loss of $336,329 was due to the write down in deferred tax assets totaling $591,592.
Key FY 2024 Highlights
- Sales for FY 2024 were $6,359,229 compared to $4,161,686 in FY 2023, which represents a 53% year over year increase.
- The increase in annual sales was primarily due to the Performance Outdoor channel.
- The windsport vertical market reported a 36% increase as a growing number of brand partners commercialized kites and wings featuring ALUULA materials.
- The pack and bag vertical market reported an increase in sales of approximately $800,000 which represents a 16.5x increase over the prior year as customers moved from field testing and prototype production to commercial scale.
- Eight windsports brands launched new products while two bag and pack companies announced their in-market launch of high-performance packs.
- Cost of sales increased to $3,756,656 compared to $2,893,813 for FY 2023.
- Gross margins increased to 41% in FY 2024 from 30% in FY 2023.
- Other income reported during FY 2024 includes a realized gain of $562,043 from the sale of the Company's investment in Xlynx Materials Inc.
- Net and comprehensive loss from Ocean Rodeo's discontinued operations was $1,302,590 in FY 2024 compared to $1,522,611 in FY 2023 representing a decrease of $220,021. If income tax and deferred taxes were excluded, Ocean Rodeo's loss before taxes decreased from $1,787,009 in FY 2023 to $723,232 in FY2024.
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. 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 sales pipeline, revenue and gross margin growth.
Financial Statements and Management's Discussion and Analysis
This earnings press release should be read in conjunction with ALUULA's audited consolidated financial statements for the year ended October 31, 2024 and the related management discussion and 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, including, but not limited to: use of proceeds from the rights offering; the Company's list of brand partners growing; the Company's advancement of its materials development; and improved efficiencies and profitability. 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.
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SOURCE: ALUULA Composites Inc.
