Timing is an extraordinary thing. During Covid, when respiratory devices sold like hotcakes, companies were golden if they knew how to talk up their products. However, it could only last so long. Take Aussie respiratory products company CleanSpace (ASX: CSX), for instance. It launched an IPO at the peak of the pandemic, at an IPO offer price of $4.41, raking in the dough. Since then, its shares have tanked to a meagre $0.31.
Now, the Company is attempting a bounce back as it secures a national sales agency contract for the United States industrial market sector.
It has secured an exclusive one-year national sales agency agreement with LineDrive LLC, a solutions-based sales and marketing agency backed by Mauve Capital Partners. LineDrive is geared towards workplace safety and productivity, simplifying processes and helping ensure compliance through unmatched industrial solutions, fact-based insights and measurable results.
Interim CEO CleanSpace, Graham McLean, said, “We are delighted to work with these well-established and highly credentialed LineDrive agents and are looking forward to expanding our business with industrial users to provide premium respiratory protection in the important US market.”
LineDrive has an extensive sales agent footprint in the US and Canada. Offering “best in class” industrial respirators, CleanSpace Pro and CleanSpace Ultra with Bluetooth connectivity, and the unique CleanSpace Plus corporate reporting program, the Company now has innovative premium technology and an agency partner to penetrate the US market.
Chair of CleanSpace, Bruce Rathie, shared, “We believe that CleanSpace advanced premium solutions for the protection of US industrial workers will deliver material benefits such as staff retention, cost efficiencies and best-practice management of exposure risks.”
CleanSpace has been undergoing a challenging financial year after experiencing a boom during the pandemic. The Company’s revenue of $5.7 million was down in 1H FY23 compared to its previous half and 1H FY22. Asia primarily led the revenue downfall. Breaking down its 1H FY23 regional sales, revenue was up in North America by 102% and up 18% on PCP. In Europe, revenue was up 60% and down 23% on the prior half, reflecting lower activity through the European summer period. And finally, in Asia, revenue was down 30% against the preceding half and down 68% on PCP, reflecting lower healthcare sales after the pandemic fuelled demand died down.
That’s why it needs such contracts to bolster its bank. Besides the current contract, CleanSpace was recently awarded three healthcare distribution contracts for the North American and United States markets. It signed two supplier agreements with leading group purchasing organisations (GPOs) and a third contract with a large national medical equipment distributor.
In H1 FY23, the Company’s cash equivalents have reduced to nearly half, from over $30 million in 1H FY22 to only about $16 million. As per the announcement, this new contract will start generating revenue in 2023.
Alinda is a Business Reporter for The Sentiment
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