Argan, Inc. Reports Third Quarter Fiscal 2025 Results
Consolidated Financial Highlights
($ in thousands, except per share data)
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October 31, |
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For the Quarter Ended: |
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2024 |
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2023 |
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Change |
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Revenues |
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$ |
257,008 |
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$ |
163,755 |
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$ |
93,253 |
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Gross profit |
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44,327 |
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19,235 |
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25,092 |
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Gross margin % |
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17.2 |
% |
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11.7 |
% |
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5.5 |
% |
Net income |
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$ |
28,010 |
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$ |
5,464 |
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$ |
22,546 |
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Diluted income per share |
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2.00 |
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0.40 |
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1.60 |
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EBITDA |
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37,509 |
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12,180 |
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25,329 |
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Cash dividends per share |
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0.375 |
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0.300 |
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0.075 |
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October 31, |
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For the Nine Months Ended: |
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2024 |
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2023 |
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Change |
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Revenues |
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$ |
641,705 |
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$ |
408,779 |
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$ |
232,926 |
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Gross profit |
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93,376 |
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57,201 |
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36,175 |
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Gross margin % |
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14.6 |
% |
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14.0 |
% |
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0.6 |
% |
Net income |
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$ |
54,090 |
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$ |
20,340 |
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$ |
33,750 |
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Diluted income per share |
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3.91 |
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1.50 |
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2.41 |
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EBITDA |
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74,241 |
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33,774 |
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40,467 |
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Cash dividends per share |
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0.975 |
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0.800 |
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0.175 |
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October 31, |
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January 31, |
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As of: |
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2024 |
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2024 |
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Change |
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Cash, cash equivalents and investments |
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$ |
506,282 |
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$ |
412,405 |
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$ |
93,877 |
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Net liquidity (1) |
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280,977 |
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244,919 |
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36,058 |
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Share repurchase treasury stock, at cost |
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102,746 |
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97,528 |
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5,218 |
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Project backlog |
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800,000 |
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757,000 |
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43,000 |
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(1) |
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Net liquidity, or working capital, is defined as total current assets less total current liabilities. |
David Watson, President and Chief Executive Officer of Argan, commented, “Our third quarter revenues and earnings, each the second highest in Company history, reflect strong execution across all of our businesses, which drove consolidated revenues growth of
“Our backlog of
“As we move through the close of our fiscal year, we are encouraged by the strengthening pipeline of planned energy facilities as the industry prepares for the anticipated unprecedented growth in power demand driven by data centers, reshoring of manufacturing operations and increased EV charger utilization. We believe our successful track record as an effective partner in the construction of both traditional and renewable power facilities position us well to capitalize on the current and future need for high quality energy resources to support the power grid.”
Third Quarter Results
Consolidated revenues for the quarter ended October 31, 2024 were
For the quarter ended October 31, 2024, Argan’s consolidated gross profit was approximately
Selling, general and administrative expenses increased by
Other income, net, for the three months ended October 31, 2024 was
For the quarter ended October 31, 2024, Argan achieved net income of
Argan maintained a substantial total balance of cash, cash equivalents and investments during the quarter. The total balances were
First Nine Months Results
Consolidated revenues for the nine months ended October 31, 2024 were
For the nine months ended October 31, 2024, consolidated gross profit increased to approximately
Selling, general and administrative expenses increased by
Other income, net, for the nine months ended October 31, 2024 was
The Company recorded income tax expense of
For the nine months ended October 31, 2024, Argan achieved net income of
Conference Call and Webcast
Argan will host a conference call and webcast for investors today, December 5, 2024, at 5:00 p.m. ET.
Domestic stockholders and interested parties may participate in the conference call by dialing (888) 506-0062 and international participants should dial (973) 528-0011; all callers shall use access code: 925404.
The call and the accompanying slide deck will also be webcast at:
https://www.webcaster4.com/webcast/page/2961/51625
The conference call and slide deck may also be accessed via the Investor Center section of the Company’s website at https://arganinc.com/investor-center. Please allow extra time prior to the call to visit the site.
A replay of the teleconference will be available until December 19, 2024, and can be accessed by dialing 877-481-4010 (domestic) or 919-882-2331 (international). The replay access code is 51625. A replay of the webcast can be accessed until December 5, 2025.
About Argan
Argan’s primary business is providing a full range of construction and related services to the power industry. Argan’s service offerings focus on the engineering, procurement and construction of natural gas-fired power plants and renewable energy facilities, along with related commissioning, maintenance, project development and technical consulting services, through its Gemma Power Systems and Atlantic Projects Company operations. Argan also owns The Roberts Company, which is a fully integrated industrial construction, fabrication and plant services company, and SMC Infrastructure Solutions, which provides telecommunications infrastructure services.
Non-GAAP Financial Measures
The Company prepares its financial statements in accordance with accounting principles generally accepted in
Safe Harbor Statement
Certain matters discussed in this press release may constitute forward-looking statements within the meaning of the federal securities laws. Reference is hereby made to the cautionary statements made by the Company with respect to risk factors set forth in its most recent reports on Form 10-K, Forms 10-Q and other SEC filings. The Company’s future financial performance is subject to risks and uncertainties including, but not limited to, the successful addition of new contracts to project backlog, the receipt of corresponding notices to proceed with contract activities, the Company’s ability to successfully complete the projects that it obtains, and the Company’s effectiveness in mitigating future losses related to the Kilroot loss contract. Actual results and the timing of certain events could differ materially from those projected in or contemplated by the forward-looking statements due to the risk factors highlighted above and described regularly in the Company’s SEC filings.
ARGAN, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS (In thousands, except per share data) (Unaudited) |
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Three Months Ended |
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Nine Months Ended |
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October 31, |
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October 31, |
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2024 |
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2023 |
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2024 |
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2023 |
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REVENUES |
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$ |
257,008 |
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$ |
163,755 |
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$ |
641,705 |
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$ |
408,779 |
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Cost of revenues |
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212,681 |
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144,520 |
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548,329 |
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351,578 |
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GROSS PROFIT |
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44,327 |
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19,235 |
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93,376 |
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57,201 |
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Selling, general and administrative expenses |
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13,995 |
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11,375 |
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37,848 |
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32,467 |
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INCOME FROM OPERATIONS |
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30,332 |
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7,860 |
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55,528 |
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24,734 |
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Other income, net |
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6,646 |
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3,733 |
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17,044 |
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7,222 |
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INCOME BEFORE INCOME TAXES |
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36,978 |
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11,593 |
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72,572 |
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31,956 |
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Income tax expense |
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8,968 |
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6,129 |
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18,482 |
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11,616 |
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NET INCOME |
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28,010 |
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5,464 |
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54,090 |
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20,340 |
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OTHER COMPREHENSIVE INCOME, NET OF TAXES |
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Foreign currency translation adjustments |
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(957 |
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(882 |
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(1,933 |
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(627 |
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Net unrealized losses on available-for-sale securities |
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(659 |
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(427 |
) |
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(169 |
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(1,147 |
) |
COMPREHENSIVE INCOME |
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$ |
26,394 |
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$ |
4,155 |
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$ |
51,988 |
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$ |
18,566 |
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NET INCOME PER SHARE |
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Basic |
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$ |
2.07 |
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$ |
0.41 |
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$ |
4.04 |
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$ |
1.52 |
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Diluted |
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$ |
2.00 |
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$ |
0.40 |
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$ |
3.91 |
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$ |
1.50 |
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WEIGHTED AVERAGE SHARES OUTSTANDING |
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Basic |
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13,530 |
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13,328 |
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13,398 |
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13,381 |
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Diluted |
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14,034 |
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13,559 |
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13,830 |
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13,549 |
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CASH DIVIDENDS PER SHARE |
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$ |
0.375 |
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$ |
0.300 |
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$ |
0.975 |
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$ |
0.800 |
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ARGAN, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (Dollars in thousands, except per share data) |
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October 31, |
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January 31, |
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2024 |
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2024 |
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(Unaudited) |
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ASSETS |
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CURRENT ASSETS |
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Cash and cash equivalents |
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$ |
175,349 |
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$ |
197,032 |
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Investments |
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330,933 |
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215,373 |
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Accounts receivable, net |
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131,660 |
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47,326 |
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Contract assets |
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44,620 |
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48,189 |
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Other current assets |
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34,579 |
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39,259 |
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TOTAL CURRENT ASSETS |
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717,141 |
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547,179 |
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Property, plant and equipment, net |
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14,147 |
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11,021 |
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Goodwill |
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28,033 |
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28,033 |
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Intangible assets, net |
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1,924 |
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2,217 |
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Deferred taxes, net |
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1,254 |
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2,259 |
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Right-of-use and other assets |
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6,365 |
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7,520 |
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TOTAL ASSETS |
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$ |
768,864 |
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$ |
598,229 |
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LIABILITIES AND STOCKHOLDERS’ EQUITY |
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CURRENT LIABILITIES |
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Accounts payable |
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$ |
87,085 |
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$ |
39,485 |
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Accrued expenses |
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78,393 |
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81,721 |
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Contract liabilities |
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270,686 |
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181,054 |
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TOTAL CURRENT LIABILITIES |
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436,164 |
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302,260 |
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Noncurrent liabilities |
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3,996 |
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5,030 |
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TOTAL LIABILITIES |
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440,160 |
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307,290 |
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STOCKHOLDERS’ EQUITY |
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Preferred stock, par value |
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— |
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— |
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Common stock, par value |
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2,374 |
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2,374 |
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Additional paid-in capital |
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168,441 |
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164,183 |
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Retained earnings |
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266,334 |
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225,507 |
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Treasury stock, at cost – 2,259,185 and 2,585,769 shares at October 31, 2024 and January 31, 2024, respectively |
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(102,746 |
) |
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(97,528 |
) |
Accumulated other comprehensive loss |
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(5,699 |
) |
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(3,597 |
) |
TOTAL STOCKHOLDERS’ EQUITY |
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328,704 |
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290,939 |
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TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY |
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$ |
768,864 |
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$ |
598,229 |
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ARGAN, INC. AND SUBSIDIARIES RECONCILIATION TO EBITDA (In thousands) (Unaudited) |
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Three Months Ended |
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October 31, |
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2024 |
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2023 |
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Net income, as reported |
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$ |
28,010 |
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$ |
5,464 |
Income tax expense |
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8,968 |
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6,129 |
Depreciation |
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|
433 |
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|
489 |
Amortization of intangible assets |
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|
98 |
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|
98 |
EBITDA |
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$ |
37,509 |
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$ |
12,180 |
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Nine Months Ended |
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October 31, |
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2024 |
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2023 |
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Net income, as reported |
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$ |
54,090 |
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$ |
20,340 |
Income tax expense |
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|
18,482 |
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|
11,616 |
Depreciation |
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|
1,376 |
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|
1,524 |
Amortization of intangible assets |
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|
293 |
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|
294 |
EBITDA |
|
$ |
74,241 |
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$ |
33,774 |
View source version on businesswire.com: https://www.businesswire.com/news/home/20241205082200/en/
Company:
David Watson
301.315.0027
Investor Relations:
John Nesbett/Jennifer Belodeau
IMS Investor Relations
203.972.9200
argan@imsinvestorrelations.com
Source: Argan, Inc.