"Could actually be any one of these very different situations. So what was the point of the letter to shareholders exactly? Since it doesn't communicate a particular situation or achievement, is its purpose just putting out some nice sounding percentages to, dare I say, raise expectations?"
My I say that this PCM update has been going on since the Las Vegas bedding exhibition!
Dear Shareholders,
Over the last year, we have communicated on several occasions the quick traction Alexium is achieving with our newest product, Alexicool. In the bedding industry, Alexicool has made a significant footprint in a very short period of time. Late last year, we secured our first significant account selling an all-in-one PCM/FR/anti-odor solution with a single global brand. From that time, to its important introduction at the biggest show in bedding, (the Las Vegas Furniture Market), to today, our bedding business has grown at an impressive pace.
The most immediate result of the success of the Las Vegas Furniture Market was the brand which debuted the Alexicool mattress, which attributed to the doubling of the supplier's annual forecast, with increased shipments starting immediately, alongside a whole series of additional brands quickly adopting our product and initiating ongoing orders. Lastly, a series of purchasing decisions at one of the largest mattress retailers in the U.S. has recently resulted in one of Alexium’s three suppliers into the bedding market doubling their ongoing orders indefinitely.
What started out as Alexicool going to a single brand through a single finisher has now expanded to our chemistry now going on ten different bedding brands representing a current run rate of over 20,000 lbs of Alexicool chemistry per week. This will provide us cash neutrality sooner than expected. We reported an average margin of 40% recently, however as long as our orders continue to increase at the pace we are seeing, we could anticipate our margin to increase from a definite 40% to 50%. This is also due to strategic R&D and supply chain choices.
About three weeks ago, I gave you a general view as to how our Alexicool™ phase change material (PCM) product line evolved into a success story in bedding. We have continued to realize great success in the PCM market, so I want to update you all on our progress and give a few specifics.
In our distribution email earlier this month, I discussed an increase of business due to a successful product launch at the Las Vegas Bedding show and subsequent growth. The numbers bear out that success. From our initial account in bedding, we made our first substantial shipments in January. In February, we increased our Alexicool shipments to customers by 91%. By the end of this month, we will have increased our monthly shipments of Alexicool by 258% over January. Due to the increase in business for Alexium in the wake of retailing giant Mattress Firm altering its offering, the growth will only increase in April. In the month of April alone, we are building inventory with sales of Alexicool expected to represent a 440% increase over what we sold just two months ago in January, a sharp growth trend which will significantly impact our upcoming 4C. We have expanded our shipments from solely US-based to now include Eastern Europe. We anticipate orders in the UK and Western Europe as early as next month as new customers come on line.
In summary, the growth of our Alexicool has exceeded our expectations as it is quickly being recognized as the best-in-industry thermal regulation product. As the number of fabric producers which are applying Alexicool to their products continues to grow (we recently added a 5th finisher) and the range of products within each finisher expanding weekly, the future of Alexicool in the bedding industry is very bright.
I will update you all again on our PCM efforts in bedding as this exciting market for Alexium evolves.
Regards,
Dirk L. Van Hyning, Ph.D.
Deputy CEO
Now I suggest you read this little bit in the above email so that when they continue to update us on our PCM products in the future I won't need to read these type of speculative remarks from someone who says they sold out in a recent post, I find those types of unsubstantiated remarks to be poor form indeed.
"I will update you all again on our PCM efforts in bedding as this exciting market for Alexium evolves."
Expect more updates with no hidden agenda attached!
