Alexium teams with leading pillow products group
Alexium International Group Ltd (ASX:AJX) has signed a supply agreement with Pegasus Home Fashions, a New Jersey based supplier of pillows to retail channels of distribution.
Under the agreement, Pegasus Home Fashions will use Alexicool® products for top of bed applications, with a focus on pillows.
Alexium holds proprietary patent applications for novel technologies developed to provide flame retardancy for a wide range of materials.
These environmentally friendly flame retardants have applications for several industries and can be customized.
Alexium also develops proprietary products for advanced thermo-regulation utilising phase change materials.
Applications under development include but are not limited to textiles, packaging, electronics, and building materials.
Alexium’s chemical treatments are currently marketed as Alexicool® and Alexiflam®.
Agreement demonstrates increasing brand recognition
The agreement has an initial two-year term and may be automatically renewed for successive one-year terms.
It also specifies the provisions for the commercial relationship, including pricing and supply capabilities, but does not include any terms for exclusivity.
This is important for Alexium given the broad range of global markets it is targeting and the potential to forge relationships with other parties, providing a diversified revenue base by client and industry.
The supply agreement formalises the relationship previously outlined in a Memorandum of Understanding entered into with Pegasus Home Fashions in 2017 and aligns Alexium with an industry leader for a key segment of the bedding market.
Alexium’s management has conducted due diligence on Pegasus Home Fashions and its suppliers, and they are confident with the distribution plan established by Pegasus Home Fashions.
Highlighting the strengthening of its established relationship with Pegasus, Alexium Chief Commercial Officer Allen Reihman said, “Pegasus Home Fashions is a world class manufacturer of pillow products and is committed to providing its customers with products that utilise the best materials and technologies.
‘’We have worked with them since 2017, and we are pleased to see the success of this line of products.’’
Embedding the Alexicool® technology with Pegasus’ top of bed products will ensure their customers have access to products with enhanced cooling properties, as thermal regulation becomes an important requirement of consumers.
Signing the supply agreement is another important milestone for Alexium, as it further demonstrates the increasing brand recognition and demand for the group’s Alexicool® technology from major manufacturers.
Agreement provides earnings predictability
The agreement follows the signing of a supply contract with a multibillion dollar North American manufacturer in March.
Alexium’s shares have increased more than 50% in just over a month as investors have recognised the company’s potential to grow revenues exponentially due to the wide ranging applications of its products.
While big ticket contracts from large corporations and government instrumentalities such as the US Department of Defence can be game changing, relationships with manufacturers of non-discretionary products that are sold into global markets are extremely valuable.
They also provide earnings stability through the cycle when large one-off contracts can produce extreme peaks and troughs in revenue generation.