Argan, Inc. Reports Second Quarter Fiscal 2024 Results
- Increased revenues and improved profitability in Q2 2024
- Strong backlog
- None
Consolidated Financial Highlights
($ in thousands, except per share data)
|
July 31, |
|
|
|||||||||
For the Quarter Ended: |
|
2023 |
|
|
|
2022 |
|
|
Change |
|||
Revenues |
$ |
141,349 |
|
$ |
118,110 |
|
$ |
23,239 |
|
|||
Gross profit |
|
23,742 |
|
|
24,387 |
|
|
(645 |
) |
|||
Gross margin % |
|
16.8 |
% |
|
20.6 |
% |
|
(3.8 |
)% |
|||
Net income |
$ |
12,767 |
|
$ |
4,222 |
|
$ |
8,545 |
|
|||
Diluted per share |
|
0.94 |
|
|
0.30 |
|
|
0.64 |
|
|||
EBITDA |
|
17,945 |
|
|
14,888 |
|
|
3,057 |
|
|||
Cash dividends per share |
|
0.25 |
|
|
0.25 |
|
|
— |
|
|||
|
|
|
|
|||||||||
|
July 31, |
|
|
|||||||||
For the Six Months Ended: |
|
2023 |
|
|
|
2022 |
|
|
Change |
|||
Revenues |
$ |
245,024 |
|
$ |
218,387 |
|
$ |
26,637 |
|
|||
Gross profit |
|
37,966 |
|
|
44,125 |
|
|
(6,159 |
) |
|||
Gross margin % |
|
15.5 |
% |
|
20.2 |
% |
|
(4.7 |
)% |
|||
Net income |
$ |
14,876 |
|
$ |
11,707 |
|
$ |
3,169 |
|
|||
Diluted per share |
|
1.10 |
|
|
0.80 |
|
|
0.30 |
|
|||
EBITDA |
|
21,594 |
|
|
25,621 |
|
|
(4,027 |
) |
|||
Cash dividends per share |
|
0.50 |
|
|
0.50 |
|
|
— |
|
|||
|
|
|
|
|||||||||
|
July 31, |
|
January 31, |
|
|
|||||||
As of: |
|
2023 |
|
|
|
2023 |
|
|
Change |
|||
Cash, cash equivalents and investments |
$ |
346,415 |
|
$ |
325,458 |
|
$ |
20,957 |
|
|||
Net liquidity (1) |
|
239,526 |
|
|
236,199 |
|
|
3,327 |
|
|||
Share repurchase treasury stock, at cost |
|
92,329 |
|
|
88,641 |
|
|
3,688 |
|
|||
Project backlog |
|
824,000 |
|
|
822,000 |
|
|
2,000 |
|
|
||
(1) |
|
Net liquidity, or working capital, is defined as total current assets less total current liabilities. |
David
Second Quarter Results
Consolidated revenues for the quarter ended July 31, 2023 were
For the three-month period ended July 31, 2023, Argan reported consolidated gross profit of approximately
Selling, general and administrative expenses declined by
For the quarter ended July 31, 2023, Argan achieved net income of
First Six Months Results
Consolidated revenues for the six months ended July 31, 2023 were
For the six months ended July 31, 2023, consolidated gross profit declined to approximately
Selling, general and administrative expenses declined slightly to
For the six months ended July 31, 2023, Argan achieved net income of
As of July 31, 2023, cash and liquid investments totaled
Share Repurchase Program
During the quarter ended July 31, 2023, the Company repurchased 77,132 shares of common stock at a cost of
Conference Call and Webcast
Argan will host a conference call and webcast for investors today, September 6, 2023, at 5 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: 405007. The call and the accompanying slide deck will also be webcast at:
https://www.webcaster4.com/Webcast/Page/2961/48950
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 September 20, 2023, and can be accessed by dialing 877-481-4010 (domestic) or 919-882-2331 (international). The replay access code is 48950. A replay of the webcast can be accessed until September 6, 2024.
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 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 |
|
Six Months Ended |
||||||||||||
|
|
July 31, |
|
July 31, |
||||||||||||
|
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
REVENUES |
|
$ |
141,349 |
|
|
$ |
118,110 |
|
|
$ |
245,024 |
|
|
$ |
218,387 |
|
Cost of revenues |
|
|
117,607 |
|
|
|
93,723 |
|
|
|
207,058 |
|
|
|
174,262 |
|
GROSS PROFIT |
|
|
23,742 |
|
|
|
24,387 |
|
|
|
37,966 |
|
|
|
44,125 |
|
Selling, general and administrative expenses |
|
|
10,501 |
|
|
|
10,984 |
|
|
|
21,092 |
|
|
|
21,559 |
|
INCOME FROM OPERATIONS |
|
|
13,241 |
|
|
|
13,403 |
|
|
|
16,874 |
|
|
|
22,566 |
|
Other income, net |
|
|
4,118 |
|
|
|
505 |
|
|
|
3,489 |
|
|
|
1,100 |
|
INCOME BEFORE INCOME TAXES |
|
|
17,359 |
|
|
|
13,908 |
|
|
|
20,363 |
|
|
|
23,666 |
|
Income tax expense |
|
|
4,592 |
|
|
|
9,686 |
|
|
|
5,487 |
|
|
|
11,959 |
|
NET INCOME |
|
|
12,767 |
|
|
|
4,222 |
|
|
|
14,876 |
|
|
|
11,707 |
|
Foreign currency translation adjustments |
|
|
(185 |
) |
|
|
(687 |
) |
|
|
255 |
|
|
|
(1,951 |
) |
Net unrealized losses on available-for-sale securities |
|
|
(683 |
) |
|
|
— |
|
|
|
(720 |
) |
|
|
— |
|
COMPREHENSIVE INCOME |
|
$ |
11,899 |
|
|
$ |
3,535 |
|
|
$ |
14,411 |
|
|
$ |
9,756 |
|
|
|
|
|
|
|
|
|
|
||||||||
NET INCOME PER SHARE |
|
|
|
|
|
|
|
|
||||||||
Basic |
|
$ |
0.95 |
|
|
$ |
0.30 |
|
|
$ |
1.11 |
|
|
$ |
0.81 |
|
Diluted |
|
$ |
0.94 |
|
|
$ |
0.30 |
|
|
$ |
1.10 |
|
|
$ |
0.80 |
|
|
|
|
|
|
|
|
|
|
||||||||
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING |
|
|
|
|
|
|
|
|
||||||||
Basic |
|
|
13,403 |
|
|
|
14,134 |
|
|
|
13,408 |
|
|
|
14,516 |
|
Diluted |
|
|
13,542 |
|
|
|
14,247 |
|
|
|
13,544 |
|
|
|
14,616 |
|
|
|
|
|
|
|
|
|
|
||||||||
CASH DIVIDENDS PER SHARE |
|
$ |
0.25 |
|
|
$ |
0.25 |
|
|
$ |
0.50 |
|
|
$ |
0.50 |
|
ARGAN, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (Dollars in thousands, except per share data) |
||||||||
|
|
|
|
|
||||
|
|
July 31, |
|
January 31, |
||||
|
|
|
2023 |
|
|
|
2023 |
|
|
|
(Unaudited) |
|
|
||||
ASSETS |
|
|
|
|
||||
CURRENT ASSETS |
|
|
|
|
||||
Cash and cash equivalents |
|
$ |
204,799 |
|
|
$ |
173,947 |
|
Investments |
|
|
141,616 |
|
|
|
151,511 |
|
Accounts receivable, net |
|
|
44,532 |
|
|
|
50,132 |
|
Contract assets |
|
|
20,747 |
|
|
|
24,778 |
|
Other current assets |
|
|
43,438 |
|
|
|
38,334 |
|
TOTAL CURRENT ASSETS |
|
|
455,132 |
|
|
|
438,702 |
|
Property, plant and equipment, net |
|
|
10,457 |
|
|
|
10,430 |
|
Goodwill |
|
|
28,033 |
|
|
|
28,033 |
|
Intangible assets, net |
|
|
2,413 |
|
|
|
2,609 |
|
Deferred taxes, net |
|
|
3,910 |
|
|
|
3,689 |
|
Right-of-use and other assets |
|
|
5,763 |
|
|
|
6,024 |
|
TOTAL ASSETS |
|
$ |
505,708 |
|
|
$ |
489,487 |
|
|
|
|
|
|
||||
LIABILITIES AND STOCKHOLDERS' EQUITY |
|
|
|
|
||||
CURRENT LIABILITIES |
|
|
|
|
||||
Accounts payable |
|
$ |
31,530 |
|
|
$ |
56,375 |
|
Accrued expenses |
|
|
67,620 |
|
|
|
49,867 |
|
Contract liabilities |
|
|
116,456 |
|
|
|
96,261 |
|
TOTAL CURRENT LIABILITIES |
|
|
215,606 |
|
|
|
202,503 |
|
Noncurrent liabilities |
|
|
5,066 |
|
|
|
6,087 |
|
TOTAL LIABILITIES |
|
|
220,672 |
|
|
|
208,590 |
|
|
|
|
|
|
||||
COMMITMENTS AND CONTINGENCIES |
|
|
|
|
||||
|
|
|
|
|
||||
STOCKHOLDERS’ EQUITY |
|
|
|
|
||||
Preferred stock, par value |
|
|
— |
|
|
|
— |
|
Common stock, par value |
|
|
2,374 |
|
|
|
2,374 |
|
Additional paid-in capital |
|
|
162,323 |
|
|
|
162,208 |
|
Retained earnings |
|
|
216,009 |
|
|
|
207,832 |
|
Less treasury stock, at cost – 2,474,636 and 2,386,699 shares at July 31, 2023 and January 31, 2023, respectively |
|
|
(92,329 |
) |
|
|
(88,641 |
) |
Accumulated other comprehensive loss |
|
|
(3,341 |
) |
|
|
(2,876 |
) |
TOTAL STOCKHOLDERS’ EQUITY |
|
|
285,036 |
|
|
|
280,897 |
|
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY |
|
$ |
505,708 |
|
|
$ |
489,487 |
|
ARGAN, INC. AND SUBSIDIARIES RECONCILIATIONS TO EBITDA (In thousands) (Unaudited) |
||||||
|
|
|
|
|
||
|
|
Three Months Ended |
||||
|
|
July 31, |
||||
|
|
|
2023 |
|
|
2022 |
Net income, as reported |
|
$ |
12,767 |
|
$ |
4,222 |
Income tax expense |
|
|
4,592 |
|
|
9,686 |
Depreciation |
|
|
488 |
|
|
747 |
Amortization of intangible assets |
|
|
98 |
|
|
233 |
EBITDA |
|
$ |
17,945 |
|
$ |
14,888 |
|
|
|
|
|
||
|
|
Six Months Ended |
||||
|
|
July 31, |
||||
|
|
|
2023 |
|
|
2022 |
Net income, as reported |
|
$ |
14,876 |
|
$ |
11,707 |
Income tax expense |
|
|
5,487 |
|
|
11,959 |
Depreciation |
|
|
1,035 |
|
|
1,556 |
Amortization of intangible assets |
|
|
196 |
|
|
399 |
EBITDA |
|
$ |
21,594 |
|
$ |
25,621 |
View source version on businesswire.com: https://www.businesswire.com/news/home/20230906382408/en/
Company Contact:
David
301.315.0027
Investor Relations Contact:
John Nesbett/Jennifer Belodeau
IMS Investor Relations
203.972.9200
Source: Argan, Inc.