Argan, Inc. (NYSE: AGX) (“Argan” or the “Company”) today
announces financial results for its first quarter of fiscal year
2024, ended April 30, 2023. The Company will host an investor
conference call today, June 8, 2023, at 5 p.m. ET.
Consolidated Financial Highlights
($ in thousands, except per share data)
April 30,
For the Quarter Ended:
2023
2022
Change
Revenues
$
103,675
$
100,277
$
3,398
Gross profit
14,224
19,738
(5,514
)
Gross margin %
13.7
%
19.7
%
(6.0
)%
Net income
$
2,109
$
7,485
$
(5,376
)
Diluted per share
0.16
0.50
(0.34
)
EBITDA
3,649
10,733
(7,084
)
Cash dividends per share
0.25
0.25
—
April 30,
January 31,
As of:
2023
2023
Change
Cash, cash equivalents, short-term
investments and available-for-sale securities
$
316,937
$
325,458
$
(8,521
)
Net liquidity (1)
232,604
236,199
(3,595
)
Share repurchase treasury stock, at
cost
89,883
88,641
1,242
Project backlog
806,000
822,000
(16,000
)
(1) 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, “During our first quarter, we reached substantial
completion on the Guernsey Power Station, the largest single-phase
gas fired project in U.S. history, a tremendous achievement by our
talented employees and evidence of their commitment to completing
complex projects. We continue to maintain strength and diversity in
our backlog. Our backlog of $0.8 billion is consistent with
year-end fiscal 2023 levels, without the addition of any major
power-plant projects, which reflects our ability to drive
incremental revenue growth by winning smaller projects to augment
our larger jobs. Our financial performance can be impacted quarter
to quarter by the timing of certain power industry projects,
depending on where they are in the construction timeline. However,
as demand for reliable energy and grid stability increases, we
believe our core competencies and proven track record as a reliable
construction partner and project manager position us well to take
advantage of the robust pipeline of opportunities in the
marketplace.”
First Quarter Results
Consolidated revenues for the quarter ended April 30, 2023 were
$103.7 million, an increase of $3.4 million, or 3.4%, from
consolidated revenues of $100.3 million reported for the comparable
prior year period. The Company experienced increased revenues at
several projects, including the Kilroot Power Station under
construction near Belfast in Northern Ireland; the three ESB
FlexGen peaker plants being built in Dublin, Ireland; and the
Trumbull Energy Center, a large combined cycle, gas-fired power
plant near Lordstown, Ohio. The increase in revenues were partially
offset by decreased revenues at the Guernsey Power Station, the
Maple Hill Solar energy project and Equinix data center project, as
these projects are generally near or at completion.
Due meaningfully to this change in the mix of major projects for
the quarter ended April 30, 2023, the Company’s consolidated gross
profit declined to approximately $14.2 million, which reflected a
consolidated gross margin of 13.7%, compared to consolidated gross
profit of $19.7 million reported for the first quarter of the prior
fiscal year, which reflected a gross margin of 19.7%.
Selling, general and administrative expenses remained consistent
at $10.6 million for the quarter ended April 30, 2023 as compared
to the same prior year period.
For the quarter ended April 30, 2023, Argan achieved net income
of $2.1 million, or $0.16 per diluted share, compared to $7.5
million, or $0.50 per diluted share, for last year’s comparable
quarter. EBITDA (earnings before interest, taxes, depreciation and
amortization) for the quarter ended April 30, 2023 was $3.6 million
compared to $10.7 million in the same period of last year. These
results were primarily affected by the reduction in gross profit
between periods and the previously reported loss related to
fraudulently-induced wire transfers.
As of April 30, 2023, our cash and liquid investments totaled
$317 million and balance sheet net liquidity was $233 million;
furthermore, the Company had no debt.
Share Repurchase Program
During the quarter ended April 30, 2023, the Company repurchased
92,656 shares of common stock at a cost of $3.7 million. Since the
share repurchase program began in November 2021, the Company has
repurchased approximately 2.5 million shares of common stock, or
approximately 15% of its outstanding shares, at a cost of
approximately $92.4 million under the $125.0 million share
repurchase plan authorized by the Company’s board of directors.
Conference Call and Webcast
Argan, Inc. will host a conference call and webcast for
investors today, June 8, 2023, at 5 p.m. ET.
Stockholders and interested parties may participate in the
conference call by dialing (888) 506-0062 and international
participants should dial (973) 528-0011 and use access code:
796707. The call and the accompanying slide deck will also be
webcast at:
https://www.webcaster4.com/Webcast/Page/2961/48475
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 June 22,
2023, and can be accessed by dialing 877-481-4010 (domestic) or
919-882-2331 (international). The replay access code is 48475. A
replay of the webcast can be accessed until June 8, 2024.
About Argan
Argan’s primary business is providing a full range of
construction and related services to the power industry, including
the renewable energy sector. 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 fabrication, construction and
industrial plant services company, and SMC Infrastructure
Solutions, 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. 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, and the Company’s ability to successfully complete the
projects that it obtains. 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)
Three Months Ended
April 30,
2023
2022
REVENUES
$
103,675
$
100,277
Cost of revenues
89,451
80,539
GROSS PROFIT
14,224
19,738
Selling, general and administrative
expenses
10,591
10,575
INCOME FROM OPERATIONS
3,633
9,163
Other (loss) income, net
(629
)
595
INCOME BEFORE INCOME TAXES
3,004
9,758
Income tax expense
895
2,273
NET INCOME
2,109
7,485
Foreign currency translation
adjustments
440
(1,264
)
Net unrealized losses on
available-for-sale securities
(37
)
—
COMPREHENSIVE INCOME
$
2,512
$
6,221
NET INCOME PER SHARE
Basic
$
0.16
$
0.50
Diluted
$
0.16
$
0.50
WEIGHTED AVERAGE NUMBER OF SHARES
OUTSTANDING
Basic
13,413
14,910
Diluted
13,546
14,992
CASH DIVIDENDS PER SHARE
$
0.25
$
0.25
ARGAN, INC. AND
SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE
SHEETS
(Dollars in thousands, except
per share data)
April 30,
January 31,
2023
2023
(Unaudited)
ASSETS
CURRENT ASSETS
Cash and cash equivalents
$
195,947
$
173,947
Short-term investments
90,614
151,511
Available-for-sale securities
30,376
—
Accounts receivable, net
60,774
50,132
Contract assets
4,914
24,778
Other current assets
42,376
38,334
TOTAL CURRENT ASSETS
425,001
438,702
Property, plant and equipment, net
10,665
10,430
Goodwill
28,033
28,033
Intangible assets, net
2,511
2,609
Deferred taxes, net
3,606
3,689
Right-of-use and other assets
5,878
6,024
TOTAL ASSETS
$
475,694
$
489,487
LIABILITIES AND STOCKHOLDERS'
EQUITY
CURRENT LIABILITIES
Accounts payable
$
36,334
$
56,375
Accrued expenses
44,755
49,867
Contract liabilities
111,308
96,261
TOTAL CURRENT LIABILITIES
192,397
202,503
Noncurrent liabilities
5,348
6,087
TOTAL LIABILITIES
197,745
208,590
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; 15,828,289 shares issued; 13,414,404
and 13,441,590 shares outstanding at April 30, 2023 and January 31,
2023, respectively
2,374
2,374
Additional paid-in capital
161,347
162,208
Retained earnings
206,584
207,832
Less treasury stock, at cost – 2,413,885
and 2,386,699 shares at April 30, 2023 and January 31, 2023,
respectively
(89,883
)
(88,641
)
Accumulated other comprehensive loss
(2,473
)
(2,876
)
TOTAL STOCKHOLDERS’ EQUITY
277,949
280,897
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY
$
475,694
$
489,487
ARGAN, INC. AND
SUBSIDIARIES
RECONCILIATION TO
EBITDA
(In thousands)
(Unaudited)
Three Months Ended
April 30,
2023
2022
Net income, as reported
$
2,109
$
7,485
Income tax expense
895
2,273
Depreciation
547
809
Amortization of intangible assets
98
166
EBITDA
$
3,649
$
10,733
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version on businesswire.com: https://www.businesswire.com/news/home/20230608005715/en/
Company Contact: David Watson 301.315.0027
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