ALUULA Composites (TSXV: AUUA) is expanding. After earning the respect of the windsports market with its patented composite materials, winning multiple world titles, and onboarding 16 global windsport brands, the company is set for its next stage of exponential growth.
You see, ALUULA Composites developed one-of-a-kind fabrics that are lighter than nylon, eight times stronger than steel, and ultra-durable. More importantly, these fabrics are 100% recycle-ready due to the company’s patented fusion process that bonds high-tech fibers and technical films without the use of glues. This produces a unique material that is garnering the attention of several industries looking to enhance the quality of their products and equipment.
For example, the world-renowned outdoor apparel brand, Arc’teryx, signed on to develop high-performance outdoor products using ALUULA’s ultralight fabrics. The company is also collaborating with MICHELIN Inflatable Solutions to maximize the construction potential of more environmentally sustainable composite materials.
What most don’t understand is how versatile ALUULA’s composites are. Since 2019, the company introduced over 50 new products for clients in the windsport, aerospace, sailing, and outdoor markets.
This product breadth speaks to the company’s growth opportunities and long-term business strategy. With revenue compounding 46.96% YoY (YTD Q2 2024), a growing product pipeline, and market-ready fabrics that trump the competition, there is no telling how high ALUULA Composites ceiling is.
That is why now is the perfect time to explore this company. ALUULA has a fantastic opportunity to showcase its unique technical fabrics to the world and management is determined to make it happen. Let’s dive in.
ALUULA’s Business Overview
Founded in 2019, ALUULA originally set out to revolutionize the windsport market using its patented and proprietary materials that were recycle-ready, lighter, stronger, and more durable than existing fabrics. Product designs in the industry had reached maturity, and the company made a breakthrough in mono-polymer textiles that were fused without adhesives.
ALUULA introduced athletes to fabric that enhanced mobility, strength, and durability of their kites, providing them with unmatched performance that enabled ALUULA to reach the top of the market in a short period.
In just a couple of years, ALUULA went from being a little-known Victoria-based startup to establishing new performance standards in the industry and helping professional windsports athletes top podiums worldwide. At present, it is working with 16 windsports brands (e.g. Duotone, Naish, Ozone, NeilPryde, etc.), with nine currently offering commercial products that leverage ALUULA materials.
However, this is only the start of ALUULA’s ambitions.
Over the past six months, the company kickstarted a strategic refocus that would maximize the potential of its mono-polymer materials. This began with expansion into several new verticals (e.g. Outdoor, Sailing, Aerospace, etc.) and the completion of two new materials: ALUULA Durlyte™ and ALUULA Graflyte™.
With a larger addressable market and improved product breadth, the company quickly attracted new clients and showcased its latest projects. This included partnerships with Arc’teryx and Durston Gear to develop ultra-lightweight backpacks, and a collaboration with Rockgeist who leveraged ALUULA’s unique fabric to build rugged bikepacking bags to travel faster and lighter in the mountains.
ALUULA also inked an R&D project with MICHELIN Inflatable Solutions, a MICHELIN company, to maximize the construction potential of more environmentally sustainable composite materials, and had its materials featured by Max Space at the 39th Space Symposium in Colorado, USA.
In all, the company has now sold its material to 28 customers who are in various stages of the development and testing process; 12 of these brands are projected to commercialize products by early 2025. As the company continues to engage with new clients and penetrate new industries, we expect that its market opportunity will grow exponentially over time.
ALUULA’s New Leadership
To maximize the potential of its strategic refocus, ALUULA welcomed Sage Berryman as its new President and CEO. Sage has an exceptional track record as a C-Suite exec, offering over 15 years of experience.
In previous roles, she was critical in leading transaction partnerships valued at over $4 billion, specifically with innovative technology companies. Sage has provided transition and interim C-level services to several organizations during critical shifts, including Co-CEO of Ralmax Group, and currently sits on multiple boards, including Coast Opportunity Funds and Syniad Innovations. She completed her MBA at Queen’s University and received BC’s Top 40 under 40 and BC’s Top Influential Women in Business awards.
With Sage overseeing ALUULA’s operations and business development strategy, founder Richard Myerscough is stepping down from his CEO and CIO positions but remains a valued member of the company’s board of directors. In his new role, he will continue to be a key contributor to ALUULA’s product innovation, spearheading its next generation of proprietary composite materials.
In all, this leadership shift marks a pivotal moment for ALUULA as it expands beyond the windsports market. With Sage at the helm, the company is set to capitalize on a new era where ALUULA products elevate the quality of materials in several domains.
Ms. Berryman said it best, “Reflecting on our journey from when we started in 2019, we have experienced remarkable progress. Our product range has expanded from a single material to fifty, the number of commercialized windsport brands featuring ALUULA has increased from one to sixteen, and we are experiencing ongoing growth in other verticals. […] With our strategic refocus plan now firmly in place, we’re poised to deliver sustainable value to our shareholders in the years ahead.”
Here’s to building an enduring business and creating innovative products that stand the test of time.
ALUULA’s Financials
One might expect that a strategic refocus causes friction for a company in the short run. However, ALUULA Composites’ performance speaks for itself.
In YTD Q2 2024, ALUULA grew its revenue by 46.96% YoY, gross profits by 106.18%, and improved its gross margin from 30.67% in H1 2023 to 43.03%. The company also reduced its net loss from $3.78 million to $993.33 thousand. These solid financial results are compounded by the fact that ALUULA has $1.136 million in cash and just $540.22 thousand in long-term debt on its balance sheet.
With the company only beginning its penetration into new verticals and the frequent onboarding of windsports brands, ALUULA is on the verge of exponential growth. This speaks to the versatility of its fabrics and the growing list of businesses seeking to enhance their products. If the company can continue to execute its revitalized business strategy while maintaining its technical advantage through its patented textiles, there is no telling how fast this business will grow.
What Differentiates ALUULA’s Composite Materials?
To understand why there is pent-up demand for ALUULA’s composite materials, you must familiarize yourself with its fusion process and the benefits its fabrics bring.
For years, multinational corporations have been trying to apply Ultra-High-Molecular-Weight Polyethylene (UHMWPE), the world’s highest strength-to-weight material, to products with mixed success. It was only until ALUULA made a breakthrough in the fusion process that enabled UHMWPE to be economically and environmentally feasible.
By discovering how to fuse technical weaves and films to a UHMWPE core without glues, the company invented the lightest and strongest soft composite materials in the world. This set new strength-to-weight standards, offering unmatched performance capabilities and next-level durability. More importantly, the absence of adhesives makes its products the only high-performance materials that are fully recyclable at the end of their useful life.
In other words, not only are ALUULA composites lighter than nylon, 8x stronger than steel, waterproof, UV and bacterial-resistant, and non-air permeable but they are also the most recycle-ready product in the market today. This explains why top-tier companies like Arc’teryx and MICHELIN are willing to collaborate with them and why ALUULA will continue attracting more prestigious brands in the future.
Should You Add ALUULA Composites to Your Radar?
ALUULA Composites is not your average small-cap company. The business has a revolutionary proprietary product and a patented fusion process that makes it the only materials manufacturer offering industry-standard strength-to-weight performance while being 100% recycle-ready.
With a new leader and business strategy that seeks to maximize the potential of these materials, ALUULA is on the verge of a major catalyst. This revived vision opens the company up to several verticals and enables it to showcase its technology on an international stage.
As investors grapple with the balance between economic performance and environmental concerns, there may be no better opportunity in the market today. ALUULA’s one-of-a-kind materials are sure to transform markets and become the next generation of high-performance fabrics.
To learn more about ALUULA Composites, check out its website here.
Disclosure/Disclaimer
We are not brokers, investment, or financial advisers; you should not rely on the information herein as investment advice. If you are seeking personalized investment advice, please contact a qualified and registered broker, investment adviser, or financial adviser. You should not make any investment decisions based on our communications. Our stock profiles are intended to highlight certain companies for YOUR further investigation; they are NOT recommendations. The securities issued by the companies we profile should be considered high risk and, if you do invest, you may lose your entire investment. Micro Math Capital and its owners currently hold shares in ALUULA Composites stock, amounting to zero dollars, and are compensated by Investor Relations Services, amounting to six teen thousand three hundred twenty dollars. Micro Math Capital and its owners reserve the right to buy and sell shares in ALUULA Composites without further notice, which may impact the share price. Please do your own research before investing, including reading the companies’ public filings, press releases, and risk disclosures. The company provided information in this profile, extracted from public filings, company websites, and other publicly available sources. We believe the sources and information are accurate and reliable but we cannot guarantee it. The commentary and opinions in this article are our own, so please do your own research.
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