Luxor Industrial Corp. V.LRL

RE:RE:RE:More detail for Q1

[TheRock07]

More discovery details that will assist in understanding Q1 sales and margins.

1....the first US contract valued at $1.8 million US began in February and was completed in April.Another smaller contract of $550,000 US began in March which also saw the initiation of a much larger contract

2...total  US contracts todate converted to CAD is approx $24 million

3...why were margins lower and costs higher in Q1?

Several reasons ......

....... to allow deeper penetration into Western and Southern United States for the companies prefabricated products, Luxor deployed new sales and marketing infrastructure

 

 

.....expanding market share in the U.S., also involved establishing micro-distribution centres to service regional growth and win contracts to drive revenues.


......Luxor also began building out their management team necesary to administer the new direction of the company which was expected to have annual sales several multiples larger than in the past

 

....Luxor also purchased and installed a wall panel plant at its Abbotsford, B.C., manufacturing facility in Q1.

The plant will be fully operational by the end of January to manufacture prefabricated walls, and precut and packaged engineered floor systems for U.S. framing contracts. These turnkey contracts call for Luxor to provide all wood framing components as well as direct labour.

 

These extra and one time costs are now either completed
or sustainably embedded .

As we are all aware, approx $25 million in contract work is now in place for completion in the remaining 3 quarters.

Undoubtedly, Luxor will continue to acquire new contracts in the US and also Canada.

With economies of scale, a low Loonie and now able to use cheaper Canadian  labor in the US, expect to see gross margins increase to higher than recent norms ( 29%).

Applied to quarterly sales several times larger than Q1, expect to see strong earnings for the remainder of the year