Industrialex fka IXC

[ibreken]

2nd quarter earnings $ Revenue up 21%. Positive net earnings.

Everything looks pretty good. Revenue is up 21% year over year ($1,088,000 vs. 842,000) Earnings are about 1/6 th of a cent a share compared with a loss last year.

Earnings from 'continued operations' would have been about 1/2 a cent a share if not brought down by 'dicontinued operations' attributed to the closing (almost) and losses of the Colorado Springs facility. At that half a cent, if they can continue at this pace which I believe is very possible (I actually think that they can easily earn 1 cent a quarter) that would put the current share price at a 1 to 2.5X PE ratio.

It appears they received orders from a major customer/ military supplier that is being filled in July and August (third quarter)in the Colorado facility delaying it's shutdown. I'm assuming the company believes this will be financially advantageous otherwise they would fill the order in Arvada , although since it's only about an hour and a half away I'm not sure for the rationale behind this.

The release states
"Potential for continued orders from this customer extending past the August deliveries are strong but not certain. Based on this new activity and potential further orders, management will evaluate a new timeframe for the Colorado Springs operations on an ongoing basis."

At June 30, 2007, the company had cash of $228,000, total working capital of $409,000, a note payable and capital lease obligation totaling $70,000. And this is for a company with a market cap of less than $1 million dollars that has just turned profitable and can potentially make in my opinion easily $500,000 a year in profit once everything is consolidated. It seems like a no brainer.

Lack of news releases (the company basically doesn't release any news anymore other than their SEDAR filings) probably isn't helping the total lack of interest in this story, added to the fact that the market likes expansion not consolidation probably is the main reason the stock is trading where it is. In my opinion it should be trading at a minumum of 20 cents right now and once 3rd quarter results are released in November with another profit of half a cent to a full cent in profit hopefully the stock will more accurately reflect where it should be trading. I'm hoping the company will begin actually PRing its earnings once it becomes more apparent that the company can be quite profitable.

Is it an exciting story? No. A profitable company with the potential to earn half the market cap or more in one year once the consolidation is complete trading at a nickel? That's just wrong. Should be 20+ cents by the end of the year with any promotion.

Here is the link to see the full financials and MD&A
http://www.sedar.com/DisplayCompanyDocuments.do?lang=EN&issuerNo=00014598