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Monday, 09/19/2016 3:26:54 PM

Monday, September 19, 2016 3:26:54 PM

Post# of 173655
LRL.v/LXRRF C$.37 Luxor Industrial Corp is a Canadian company that manufactures engineered wood products for floor and wall systems. They acquired a framing company in February 2016 that has driven a huge increase in sales in 2016. These are prefabricated wall systems that allow contractors to eliminate cutting crews on job sites and decrease construction times for medium sized commercial projects.

Sales for 2015 were C$3,157,504 resulting in a loss of C$125,228.

Sales in Q1 were C$2,559,854 resulting in a loss of C$302,735. Loss included costs of the acquisition.

Sales in Q2 were C$9,503,494 resulting in a net profit of C$909,315 or .023eps. This is the first full qtr of sales including the Mill Frame LLC. Framing gross margins are much lower than the engineered products previously sold by Luxor. Gross margins averaged 26.4% in 2015 versus 14.7% in Q2.

CAPITAL STRUCTURE

39,936,779 shares outstanding 6/30/16
4,000,000 shares issued 6/10/16 at C$.20 + 1 full warrant at .265
6,250,000 warrants outstanding expiring 6/17. 2.25MM @C$.22&4MM@.265
3,750,000 options outstanding
53,936,779 FD share count

Potential weakness in share price will happen in 11/16 due to 6,250,000 shares recently issued that will become free trading in November. Plus an equal number of warrants are in the money and could be exchanged for shares and traded.

SALES BACKLOG

Company has continued to announce sales in the US and Canada. The most recent PR was today for a project in Washington State for US$1.2million. Total backlog for US projects in 2016&2017 is US$27million. Total backlog including Canadian products for the same time period is US$35million.

https://finance.yahoo.com/news/luxor-mill-frame-llc-awarded-120000072.html

https://www.millframe.com/news/

I bought a small position today at C$.37. Construction is booming in the Seattle area. You can see a dozen cranes on the Seattle skyline at various highrise projects. This small Canadian company has secured almost US$30 million in business in a short time. I expect sales to moderate towards $6million in future qtrs but should remain profitable. Expenses in Q2 were around 400K so at similar gross margins to Q2 of 14.7%, expect gross margins of C$800K and a net around C$400K or .01eps.

The company reported earlier in the year that there was a shortage of qualified supervisors for building contracts in the US and that they had qualified 5 employees to work in the US in supervisory capacities.

This isn't a true value buy until the company demonstrates a consistent record of sales and profitability but does represent a play on the growth in Seattle and surrounding communities. Luxor did report one major project sale in Arizona but most have been in close proximity to Seattle.

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