Declares Quarterly Dividend of $0.25 Per
Share
Argan, Inc. (NYSE:AGX) (“Argan” or the “Company”) today
announced financial results for its fiscal year and fourth quarter
ended January 31, 2021. For additional information, please read the
Company’s Annual Report on Form 10-K, which the Company intends to
file today with the U.S. Securities and Exchange Commission (the
“SEC”). The Annual Report can be retrieved from the SEC’s website
at www.sec.gov or from the Company’s website at
www.arganinc.com.
Summary Information (dollars in thousands, except per
share data)
January 31,
2021
2020
Change
For the Fiscal Years Ended:
Revenues
$
392,206
$
238,997
$
153,209
Gross profit (loss)
62,067
(6,820
)
68,887
Gross margin %
15.8
%
(2.9
)%
18.7
%
Net income (loss) attributable to the
stockholders of the Company
$
23,851
$
(42,689
)
$
66,540
Diluted per share
1.51
(2.73
)
4.24
EBITDA attributable to the stockholders of
the Company
29,544
(45,093
)
74,637
Diluted per share
1.87
(2.89
)
4.76
Cash dividends per share
3.00
1.00
2.00
January 31,
As of:
2021
2020
Change
Cash, cash equivalents and short-term
investments
$
456,726
$
327,862
$
128,864
Net liquidity (1)
270,133
277,721
(7,588
)
RUPO (2)
552,531
781,400
(228,869
)
(1)
Net liquidity, or working capital, is
defined as total current assets less total current liabilities.
(2)
The amount of remaining unsatisfied
performance obligations (“RUPO”) represents the project backlog
related to active contracts with customers, as determined under
revenue recognition rules.
“It was a tremendous Fiscal 2021 for Argan operationally and
financially compared to last year,” Rainer Bosselmann, Chairman and
Chief Executive Officer of Argan, said. “The $75 million EBITDA
turnaround during the COVID-19 pandemic is a testament to our
conservative approach and dedicated employees. While promoting
safety, all of our business segments improved profitability as a
percent of revenues and decreased their operating costs,
translating to an improved bottom line. With the successes of the
just concluded fiscal year and other prior years as well, we were
pleased to return almost $50 million in value back to our
shareholders by paying $3.00 per share in dividends during the
course of the year.”
Summarizing the results for the year, he continued, “Gemma Power
Systems continues to drive our business with increased execution on
the Guernsey Power Station project which is the largest in our
history. APC reduced its loss on a major project in the UK and is
working hard to help its customer successfully complete the
project. Additionally, all of our subsidiaries have generally
increased the number of revenue opportunities.
“As I have noted before, while certain EPC project development
timelines have proven to be longer than originally anticipated and
it is possible that some of these projects ultimately will not be
built, we have multiple signed EPC contracts for power plant
projects totaling several billion dollars in work for us. Even
though many factors are out of our control, we are optimistic that
we will receive the construction go ahead on several of these
projects and others in this new year. We are negotiating
exclusively with the owners of several significant renewable power
projects for which we expect to begin EPC services contract
activities during the year. These additions should grow our
renewable power sector business as complementary to our core
gas-fired power plant business,” he concluded.
Fiscal Year 2021 Results:
Consolidated revenues for the year ended January 31, 2021
(“Fiscal 2021”) were $392.2 million, which represented an increase
of $153.2 million, or 64.1%, from consolidated revenues of $239.0
million reported for the year ended January 31, 2020 (“Fiscal
2020”). The increase was primarily due to increasing revenues at
Gemma Power Systems (“GPS”) associated with the construction of the
Guernsey Power Station, which did not commence until the third
quarter of Fiscal 2020. While we were able to increase
profitability as a percent of revenues at all of our non-GPS
subsidiaries, we did experience an overall decrease in revenues for
the year at each of them compared to the prior year. We believe
that all of our businesses were adversely impacted, to some degree,
by continuing difficulties presented by the COVID-19 pandemic.
These difficulties include, among others, delayed project awards
and starts, restrictive and reduced work environments, additional
health and safety costs, and compliance with various government
lockdowns and other requirements.
Consolidated gross profit for Fiscal 2021 was $62.1 million, or
15.8% of the corresponding consolidated revenues, which reflected
the favorable impacts of the higher consolidated revenues. This
contrasts significantly to the consolidated gross loss for Fiscal
2020 in the amount of $6.8 million, which was driven by the
subcontract loss incurred by Atlantic Projects Company in the
reported amount of $33.6 million, related to the TeesREP
project.
Selling, general and administrative expenses decreased by 11.5%,
to $39.0 million for Fiscal 2021 from an amount of $44.1 million
for the prior year. In addition, during Fiscal 2020, we recorded an
impairment loss related to the goodwill of two of our subsidiaries
in the aggregate amount of $4.9 million. Offsetting some of these
cost savings, due significantly to the extremely low rates of
return on amounts invested in cash equivalents and short-term
investments during Fiscal 2021, other income declined to $1.9
million from $8.1 million for Fiscal 2020 despite the increase in
the amount of invested funds between years.
Due primarily to the consolidated pre-tax book income reported
for Fiscal 2021 in the amount of $24.9 million, we reported income
tax expense in the amount of $1.1 million for the year, which
amount is net of a $4.4 million net operating loss carryback
benefit, substantially all of which was recorded in the first
quarter of Fiscal 2021. The consolidated income tax benefit of $7.1
million for Fiscal 2020 related substantially to the loss before
income taxes incurred during the year.
For Fiscal 2021, our improved overall operating performance
resulted in net income attributable to our stockholders in the
amount of $23.9 million, or $1.51 per diluted share. Last year, we
reported a net loss attributable to our stockholders in the amount
of $42.7 million, or $2.73 per dilutive share. In December 2020,
the Company paid its fourth regular quarterly cash dividend of
$0.25 per share of common stock for Fiscal 2021, and a special cash
dividend payment of $1.00 per share of common stock.
As of January 31, 2021, cash, cash equivalents and short-term
investments totaled $457 million and net liquidity was $269
million; furthermore, the Company had no debt. The Company’s
consolidated amount of RUPO was approximately $0.6 billion as of
January 31, 2021.
Fourth Quarter Results:
Revenues increased 72% to $117.2 million for the fourth quarter
of Fiscal 2021, compared to $68.0 million for the fourth quarter
last year, as we experienced increased business activity at all of
our subsidiaries which reflected increased project work as the
COVID-19 impacts begin to abate and the increasing activities on
the Guernsey Power Station project. Gross profits increased 319% to
$22.1 million for the fourth quarter of Fiscal 2021 from $5.2
million for last fourth quarter, generally reflecting the reasons
discussed in the full year results above.
Selling, general and administrative expenses decreased by 17.4%,
to $10.2 million for the current quarter from an amount of $12.4
million included in the results for the prior year quarter which
also included a goodwill impairment loss of $2.8 million. Due to
our profitable fourth quarter for Fiscal 2021, we recorded income
tax expense in the amount of $2.5 million.
As a result, net income attributable to our stockholders for the
three months ended January 31, 2021 increased to $9.6 million, or
$0.60 per diluted share, compared to a loss of $7.2 million, or
$0.46 per diluted share, for last year’s fourth quarter.
Quarterly Dividend:
On Monday, April 12, 2021, our Board of Directors declared a
regular quarterly cash dividend in the amount of $0.25 per share of
common stock, payable April 30, 2021 to stockholders of record at
the close of business on April 22, 2021.
About Argan, Inc.
Argan’s primary business is providing a full range of 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, 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
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 and 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 success in minimizing
the adverse impacts of the COVID-19 pandemic on the Company’s
businesses. The Company has several signed EPC contracts that have
not started and may not start as forecasted due to market and other
circumstances beyond its control. 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 number of
factors described from time to time in the Company’s SEC filings.
In addition, 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.
ARGAN, INC. AND
SUBSIDIARIES
CONDENSED CONSOLIDATED
STATEMENTS OF EARNINGS
(In thousands, except per
share data)
Three Months Ended
Years Ended
January 31,
January 31,
2021
2020
2021
2020
REVENUES
$
117,235
$
67,988
$
392,206
$
238,997
Cost of revenues
95,150
62,739
330,139
245,817
GROSS PROFIT (LOSS)
22,085
5,249
62,067
(6,820
)
Selling, general and administrative
expenses
10,214
12,364
39,041
44,125
Impairment losses
—
2,823
—
4,895
INCOME (LOSS) FROM OPERATIONS
11,871
(9,938
)
23,026
(55,840
)
Other income, net
145
603
1,859
8,075
INCOME (LOSS) BEFORE INCOME
TAXES
12,016
(9,335
)
24,885
(47,765
)
Income tax (expense) benefit
(2,465
)
2,117
(1,074
)
7,053
NET INCOME (LOSS)
9,551
(7,218
)
23,811
(40,712
)
Net (loss) income attributable to
non-controlling interests
—
(30
)
(40
)
1,977
NET INCOME (LOSS) ATTRIBUTABLE TO THE
STOCKHOLDERS OF ARGAN, INC.
9,551
(7,188
)
23,851
(42,689
)
Foreign currency translation
adjustments
685
55
35
(770
)
COMPREHENSIVE INCOME (LOSS)
ATTRIBUTABLE TO THE STOCKHOLDERS OF ARGAN, INC.
$
10,236
$
(7,133
)
$
23,886
$
(43,459
)
NET INCOME (LOSS) PER SHARE
ATTRIBUTABLE TO THE STOCKHOLDERS OF ARGAN, INC.
Basic
$
0.61
$
(0.46
)
$
1.52
$
(2.73
)
Diluted
$
0.60
$
(0.46
)
$
1.51
$
(2.73
)
WEIGHTED AVERAGE NUMBER OF SHARES
OUTSTANDING
Basic
15,697
15,634
15,668
15,621
Diluted
15,880
15,634
15,825
15,621
CASH DIVIDENDS PER SHARE
$
1.25
$
0.25
$
3.00
$
1.00
ARGAN, INC. AND
SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE
SHEETS
(In thousands, except share
and per share data)
January 31,
2021
2020
ASSETS
CURRENT ASSETS
Cash and cash equivalents
$
366,671
$
167,363
Short-term investments
90,055
160,499
Accounts receivable, net
28,713
37,192
Contract assets
26,635
33,379
Other current assets
34,146
23,322
TOTAL CURRENT ASSETS
546,220
421,755
Property, plant and equipment, net
20,361
22,539
Goodwill
27,943
27,943
Other purchased intangible assets, net
4,097
5,001
Deferred taxes
249
7,894
Right-of-use and other assets
3,760
2,408
TOTAL ASSETS
$
602,630
$
487,540
LIABILITIES AND EQUITY
CURRENT LIABILITIES
Accounts payable
$
53,295
$
35,442
Accrued expenses
50,750
35,907
Contract liabilities
172,042
72,685
TOTAL CURRENT LIABILITIES
276,087
144,034
Other noncurrent liabilities
4,135
2,476
TOTAL LIABILITIES
280,222
146,510
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; 15,706,202 and 15,638,202 shares
issued at January 31, 2021 and 2020, respectively; 15,702,969 and
15,634,969 shares outstanding at January 31, 2021 and 2020,
respectively
2,356
2,346
Additional paid-in capital
153,282
148,713
Retained earnings
166,110
189,306
Accumulated other comprehensive loss
(1,081
)
(1,116
)
TOTAL STOCKHOLDERS’ EQUITY
320,667
339,249
Non-controlling interests
1,741
1,781
TOTAL EQUITY
322,408
341,030
TOTAL LIABILITIES AND EQUITY
$
602,630
$
487,540
ARGAN, INC. AND
SUBSIDIARIES
Reconciliations to
EBITDA
(In
thousands)(Unaudited)
Three Months Ended
January 31,
2021
2020
Net income (loss), as reported
$
9,551
$
(7,218
)
Income tax expense (benefit)
2,465
(2,117
)
Depreciation
917
903
Amortization of purchased intangible
assets
227
272
EBITDA
13,160
(8,160
)
EBITDA of non-controlling interests
—
30
EBITDA attributable to the stockholders of
Argan, Inc.
$
13,160
$
(8,130
)
Years Ended
January 31,
2021
2020
Net income (loss), as reported
$
23,811
$
(40,712
)
Income tax expense (benefit)
1,074
(7,053
)
Depreciation
3,715
3,513
Amortization of purchased intangible
assets
904
1,136
EBITDA
29,504
(43,116
)
EBITDA of non-controlling interests
40
(1,977
)
EBITDA attributable to the stockholders of
Argan, Inc.
$
29,544
$
(45,093
)
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210414005899/en/
Company: Rainer Bosselmann 301.315.0027
Investor Relations: David Watson 301.315.0027
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