(MENAFN- ProactiveInvestors)
( AX:AJX OTC QX:AXXIY) has set out a near term revenue outlook in the Defense Sector and the Commercial Sector with the company's break out year getting better.
The company's products have generated a number of innovative applications and solutions in the flame retardant markets.
Alexium has now contracted with the United States Department of Defense through the U.S. Army Natick Soldier Systems Center and The Batelle Memorial Institute - which is the world’s largest non profit research and development organisation.
Alexium is finalising administrative details with Batelle and first payments are expected to be received by Alexium in the first quarter of 2015.
During the course of 2014 Alexium worked with various arms of the Department of Defense to develop its suite of environmentally friendly FR chemistries for defense sector fabrics.
The company has been able to show that its FR solutions are performance enhancing cost effective durable environmentally friendly and well suited for the new generation 50/50 nylon/cotton fabric (Nyco) blends being sought by the Department of Defense to provide better durability and performance.
Launching FR products into the defense sector will continue to be a significant focus in 2015.
Nick Clark CEO and executive director commented:
“Whilst we grow revenues in the Defense sector transport furnishings and apparel markets in the US Europe and elsewhere during 2015 Alexium will also be able to look to joint venture our FR technology to replace brominated compounds widely used in the building industry and electronics industry and capture more of this $7 Billion annual market."
Commercial sales growth
Based on continuing successful product performance Alexium continues to fill an aggressive scale-up pipeline with revenue forecasts on target beginning 1Q 2015.
Notwithstanding that the textile industry has historically been slow to adopt change Alexium has made significant progress in various customer’s development cycles with a number of production trials ongoing.
are moving to eliminate bromines the traditional mainstay of FR from their products as consumer awareness and potential government legislation drives product suppliers to seek environmentally friendly FR solutions.
Key indicators:
- Alexium has provided FR treatments over textile materials for over 20 which have all passed flame retardant specifications. Those are working to engineer in additional product specific functionalities for end user requirements such as enhanced breathability water proofing oil and stain repellency and the like before moving to scale up;
- Alexium is currently working with 9 in scale-up for which Alexium has produced FR fabrics which pass all the respective customer performance specifications;
- Alexium has already achieved commercial production with 3 of those ;
- Alexium expects the first 2 to enter into supply contracts for sustained revenue in the first quarter of 2015 with the third currently reviewing end user requirements and approval processes. Just these first two opportunities alone represents $1m a year in initial recurring revenue with ramp ups expected; and
- Alexium’s chemistries have repeatedly shown the ability to meet flame resistance standards in virtually every single fabric substrate in a wide range of textile markets.
Alexium's chemistry’s performance level and ease of use has allowed the company to move through the scale-up process much faster than typical new product times and this has Alexium primed for a strong financial start to 2015.
European sales
A second delivery of Alexium chemistry to I Textiles is on target for January 2015 for an expansion of the Asia and European product rollout.
Alexium said that it also expects the first customer of from its distribution partnership with Euroflam in the UK to proceed to a commercial supply contract for FR solutions in 2015.
Alexium partners with EAS Advisors
Alexium recently formally partnered with New York’s EAS Advisors to provide support for its continued growth in the U.S. including a proposed listing in 2015.
EAS Advisors was founded by Eddie Sugar in 2008 and has a strong record of success in exposing ASX listed companies to the U.S. market.
At the time Sugar said: “Alexium is a company we see as a great growth story.
“We are pleased to work with them during this exciting time as they transition to a fully commercialised company and assist them in their stated goal to list on a U.S. exchange next year."
Grant and partnerships
Alexium continues to work closely with Israel based $6.5 billion large scale flame retardant producer Israel Chemicals (TLV:ICL) to develop new non brominated products for their .
This is supported by a $250000 grant to Alexium under the South Carolina Research Authority’s SC/Israel Collaborative R&D Program.
Analysis
Alexium enters 2015 in a strong position with increasing recurring revenues and sales growth low cash costs and over $5 million in cash.
The market is moving towards the company's cost effective environmentally friendly FR solutions as bromine is replaced in consumer products and the Defense sector.
Alexium is now looking for large annuity revenues in the Defense Sector and the Commercial Sector.
The company has now contracted with the United States Department of Defense and the initial primary program targeted was the Flame Resistant Army Combat Uniform.
This is a program for the US Army that produces 4-6 million yards of fabric per year that could produce a recurring revenue potential of US$10-$16M per year for Alexium.
This is outstanding potential for a company with a current market cap. of circa A$100 million.
It is also a primary motivator for EAS Advisors and Eddie Sugar to become involved Proactive Investors believes with this kind of upside and revenue scaling.
Alexium product advantages:
Alexium's FR chemistry meets textile industry and regulators “urgent” demand for “green” FR chemistry to meet new strict environmental regulations.
Not to be forgotten Alexium has over 20 patents in 9 different countries 3 Patent applications regarding FR Chemical treatments and flame retardant emulsions which provide a strong platform for revenue growth for the company.
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