Argan, Inc. (NYSE: AGX) today announced financial
results for its second quarter and six month period ended July 31,
2015.
Second Quarter 2015 Highlights:
- Revenues of $97.4 million for the
current quarter vs. $85.5 million in the first quarter ended April
30th.
- Revenues of $182.9 million for the six
months ended July 31, 2015 vs. $153.2 million for the six months
ended July 31, 2014.
- Net income attributable to our
stockholders was $11.3 million and $18.8 million for the quarter
and six months ended July 31, 2015 vs. $8.6 million and $12.0
million for the quarter and six months ended July 31, 2014.
- EBITDA attributable to our stockholders
was $19.4 million for the current quarter and $31.9 million for the
six months ended July 31, 2015.
- Cash, cash equivalents and short-term
investments totaled just under $300 million at quarter-end.
Our continued strong management of two large, gas-fired power
plant projects has resulted in increased revenues and gross profit
for the six months ending July 31, 2015 vs. the same period in
2014. Year to date revenues increased by $29.7 million to $182.9
million for the six months ended July 31, 2015. Our year to date
gross profit increased to $49.7 million, or 27% of corresponding
revenues, from $31.6 million, or 21% of corresponding revenues, for
the six month period July 31, 2014. For the current quarter,
revenues declined slightly to $97.4 million. However, our gross
profit for the current quarter increased to $28.5 million, or 29%
of corresponding revenues, from $21.6 million, or 21% of
corresponding revenues, for last year’s second quarter.
Due primarily to the strong performance of the power industry
services business, net income attributable to our stockholders for
the second quarter was $11.3 million, or $0.75 per diluted share,
compared with net income attributable to our stockholders of $8.6
million, or $0.58 per diluted share for the second quarter last
year. Net income attributable to our stockholders for the six
months ended July 31, 2015 was $18.8 million, or $1.26 per diluted
share, and was $12.0 million, or $0.82 per diluted share, for the
comparable period last year.
Likewise, consolidated EBITDA attributable to our stockholders
increased by $5.5 million to $19.4 million for the current quarter,
and increased by $12.5 million to $31.9 million for the six months
ended July 31, 2015.
Contract backlog increased during the current quarter to $660
million from $345 million at the end of the first quarter due to
the addition of our recently announced EPC contract with Moxie
Freedom. Subsequent to the quarter ended July 31, 2015, we added
contract value of approximately $650 million to our backlog as a
result of three EPC contracts; a $100 million contract with Exelon
and 2 contracts totaling $550 million with NTE Energy.
Commenting on Argan’s second quarter results, Rainer Bosselmann,
Chairman and Chief Executive Officer, stated, “Our effective
management of large gas-fired power projects has resulted in
consistently strong revenues and gross margins. We look forward to
the next three to five years, given our strong and improved
backlog.”
About Argan, Inc.
Argan’s primary business is providing a full range of services
to the power industry including the engineering, procurement and
construction of gas-fired and biomass-fired power plants, along
with related commissioning, operations management, maintenance,
project development and consulting services, through its Gemma
Power Systems and Atlantic Projects Company operations. Argan also
owns Southern Maryland Cable, which provides telecommunications
infrastructure services.
Certain matters discussed in this press release may constitute
forward-looking statements within the meaning of the federal
securities laws and are subject to risks and uncertainties
including, but not limited to: (1) the Company’s ability to
achieve its business strategy while effectively managing costs and
expenses; (2) the Company’s ability to successfully and
profitably integrate acquisitions; and (3) the continued
strong performance of our power industry services business. Actual
results and the timing of certain events could differ materially
from those projected in or contemplated by the forward-looking
statements due to a number of factors detailed from time to time in
Argan’s filings with the Securities and Exchange Commission. In
addition, reference is hereby made to cautionary statements with
respect to risk factors set forth in the Company’s most recent
reports on Form 10-K and 10-Q, and other SEC filings.
ARGAN, INC. AND SUBSIDIARIES Consolidated
Statements of Operations (Unaudited) Three
Months Ended July 31, Six Months Ended July 31,
2015 2014 2015 2014
REVENUES Power industry services $ 93,471,000 $ 100,418,000
$ 176,355,000 $ 150,242,000 Telecommunications infrastructure
services 3,963,000 1,612,000 6,566,000
2,979,000 Revenues 97,434,000 102,030,000
182,921,000 153,221,000
COST OF REVENUES Power
industry services 66,136,000 79,261,000 128,515,000 119,311,000
Telecommunications infrastructure services 2,805,000
1,205,000 4,746,000 2,296,000 Cost of revenues
68,941,000 80,466,000 133,261,000 121,607,000
GROSS PROFIT 28,493,000 21,564,000 49,660,000 31,614,000
Selling, general and administrative expenses 4,848,000
4,481,000 10,387,000 7,859,000
INCOME FROM
OPERATIONS 23,645,000 17,083,000 39,273,000 23,755,000 Other
income, net 128,000 41,000 212,000
63,000
INCOME BEFORE INCOME TAXES 23,773,000 17,124,000
39,485,000 23,818,000 Income tax expense 7,939,000
5,104,000 12,800,000 6,997,000
NET INCOME
15,834,000 12,020,000 26,685,000 16,821,000
Net income attributable to noncontrolling
interests
4,527,000 3,470,000 7,875,000 4,796,000
NET INCOME ATTRIBUTABLE TO THE STOCKHOLDERS OF ARGAN,
INC. $ 11,307,000 $ 8,550,000 $ 18,810,000 $ 12,025,000
EARNINGS PER SHARE ATTRIBUTABLE TO THE
STOCKHOLDERS OF ARGAN, INC.
Basic $ 0.77 $ 0.59 $ 1.28 $ 0.84 Diluted $ 0.75 $ 0.58 $ 1.26 $
0.82
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING Basic
14,747,000 14,399,000 14,693,000 14,350,000
Diluted 15,003,000 14,655,000 14,952,000
14,641,000
ARGAN, INC. AND SUBSIDIARIES
Reconciliations to EBITDA Consolidated Operations
(Unaudited) Three Months Ended July 31,
2015 2014 Net income $ 15,834,000 $ 12,020,000 Less
net income attributable to noncontrolling interests (4,527,000 )
(3,470,000 ) Interest expense (34,000 ) -- Income tax expense
7,852,000 5,104,000 Depreciation 140,000 141,000 Amortization of
purchased intangible assets 104,000 61,000 EBITDA
attributable to the stockholders of Argan, Inc. $ 19,369,000 $
13,856,000
Power Industry Services
(Unaudited)
Three Months Ended July 31, 2015 2014
Income before income taxes $ 24,787,000 $ 18,428,000 Less pre-tax
income attributable to noncontrolling interests (4,614,000 )
(3,470,000 ) Interest expense (34,000 ) -- Depreciation 95,000
96,000 Amortization of purchased intangible assets 104,000
61,000 EBITDA attributable to the stockholders of Argan,
Inc. $ 20,338,000 $ 15,115,000
Consolidated Operations
(Unaudited)
Six Months Ended July 31, 2015 2014 Net
income $ 26,685,000 $ 16,821,000 Less net income attributable to
noncontrolling interests (7,875,000 ) (4,796,000 ) Interest expense
(101,000 ) -- Income tax expense 12,756,000 6,997,000 Depreciation
258,000 283,000 Amortization of purchased intangible assets
164,000 121,000 EBITDA attributable to the stockholders of
Argan, Inc. $ 31,887,000 $ 19,426,000
Power Industry Services
(Unaudited)
Six Months Ended July 31, 2015 2014
Income before income taxes $ 41,787,000 $ 26,437,000 Less pre-tax
income attributable to noncontrolling interests (7,919,000 )
(4,796,000 ) Interest expense (101,000 ) -- Depreciation 170,000
192,000 Amortization of purchased intangible assets 164,000
121,000 EBITDA attributable to the stockholders of Argan,
Inc. $ 34,101,000 $ 21,954,000
Management uses EBITDA, a non-GAAP financial measure, for
planning purposes, including the preparation of operating budgets
and the determination of appropriate levels of operating and
capital investments. Management believes that EBITDA provides
additional insight for analysts and investors in evaluating the
Company's financial and operational performance and in assisting
investors in comparing the Company's financial performance to those
of other companies in the Company's industry. However, EBITDA is
not intended to be an alternative to financial measures prepared in
accordance with GAAP and should not be considered in isolation from
the Company’s GAAP results of operations. Pursuant to the
requirements of SEC Regulation G, reconciliations between the
Company's GAAP and non-GAAP financial results are included in the
presentations above and investors are advised to carefully review
and consider this information as well as the GAAP financial results
that are presented in the Company's SEC filings.
ARGAN, INC. AND SUBSIDIARIES CONSOLIDATED
BALANCE SHEETS July 31, 2015 January 31,
2015 ASSETS (Unaudited) (Note 1)
CURRENT ASSETS: Cash and cash equivalents $182,136,000
$333,691,000 Short-term investments 117,064,000 -- Accounts
receivable, net of allowance for doubtful accounts 38,839,000
27,330,000 Costs and estimated earnings in excess of billings
2,943,000 455,000 Notes receivable and accrued interest 6,281,000
1,786,000 Prepaid expenses and other current assets 2,856,000
1,092,000
TOTAL CURRENT ASSETS 350,119,000
364,354,000 Property, plant and equipment, net of accumulated
depreciation 5,189,000 6,518,000 Goodwill 22,887,000 18,476,000
Intangible assets, net of accumulated amortization 1,863,000
1,845,000
TOTAL ASSETS $380,058,000
$391,193,000
LIABILITIES AND EQUITY
CURRENT LIABILITIES: Accounts payable $ 32,392,000 $
37,691,000 Accrued expenses 24,022,000 15,976,000 Billings in
excess of costs and estimated earnings 114,587,000 161,564,000
Deferred income tax liabilities 656,000 201,000
TOTAL CURRENT LIABILITIES 171,657,000 215,432,000 Deferred
income tax liabilities 821,000 809,000
TOTAL
LIABILITIES 172,478,000 216,241,000
COMMITMENTS AND CONTINGENCIES STOCKHOLDERS’
EQUITY:
Preferred stock, par value $0.10 per share
– 500,000 shares authorized; no shares issued and outstanding
--
--
Common stock, par value $0.15 per share –
30,000,000 shares authorized; 14,792,702 and 14,634,434 shares
issued at July 31 and January 31, 2015, respectively; 14,789,469
and 14,631,201 shares outstanding at July 31 and January 31, 2015,
respectively
2,219,000
2,195,000
Additional paid-in capital 115,621,000 109,696,000 Retained
earnings 92,418,000 73,614,000 Treasury stock, at cost – 3,233
shares at July 31 and January 31, 2015 (33,000 ) (33,000 )
TOTAL
STOCKHOLDERS’ EQUITY 210,225,000 185,472,000 Noncontrolling
interests (2,645,000 ) (10,520,000 )
TOTAL EQUITY
207,580,000 174,952,000
TOTAL LIABILITIES AND
EQUITY $380,058,000 $391,193,000
Note 1 – The condensed consolidated
balance sheet as of January 31, 2015 has been derived from audited
consolidated financial statements.
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version on businesswire.com: http://www.businesswire.com/news/home/20150908006710/en/
Argan, Inc.Company Contact:Rainer Bosselmann,
301-315-0027orInvestor Relations Contact:Cynthia Flanders,
301-315-0027
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