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)

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.

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