Core Insights - Argan (NYSE: AGX) reported a strong performance in its first quarter of FY26, driven by robust demand in its core power services segment [1] Company Performance - The company is expected to maintain its momentum due to a favorable demand environment for its services [1] Industry Outlook - The overall market conditions appear to be supportive for companies with strong foundations, particularly in the technology, industrial, and conglomerate sectors [1]

Group 1 - John "Jack" Bowman is a registered investment advisor and research analyst focusing on macroeconomics and income-focused investments [1] - He contributes to the Sungarden Investors Club on Seeking Alpha, where he teaches investors about risk management and total return investing [2] - Bowman co-hosts weekly live sessions discussing market thoughts and ongoing trades, emphasizing that investors have the tools to manage portfolios with less risk [2] Group 2 - The approach taken by Bowman combines his experience as a former teacher with his current role as an investment advisor [2] - The educational aspect of Bowman's work highlights the lack of teaching on the effective use of investment tools [2] - The quote from Timothy Snyder suggests that historical lessons can guide current investment strategies [3]

Core Viewpoint - Argan Inc. (NYSE: AGX) has experienced a significant price increase of 120% over the past 12 months, but current price charts indicate potential weakness, coupled with an expensive valuation [1]. Company Analysis - The company is identified as a value-focused investment opportunity, with a preference for stocks that are undervalued and have near-term catalysts [1]. - The investment horizon for the company ranges from one quarter to two years, indicating a medium-term investment strategy [1]. Market Context - The analysis is part of a broader focus on sectors including chemicals, homebuilders, building materials, industrials, and metals & mining, suggesting a diversified approach to investment research [1].

Crude Value Insights offers you an investing service and community focused on oil and natural gas. We focus on cash flow and the companies that generate it, leading to value and growth prospects with real potential. Even the most seasoned investors make mistakes. I'm talking about the Warren Buffetts of the world. If they make mistakes, you can imagine that experienced investors who are less seasoned, such as myself with 17 years of experience under my belt, will certainly make Sign up today for your two-we ...

P R E S E N T A T I O N First Quarter Fiscal 2026 Results 2 Q1 2026 Highlights 3 • Consolidated Q1 revenues increased 23% year over year with gross margin of 19% • Q1 earnings per diluted share of $1.60, up $1.02 year over year • Q1 EBITDA of $30M, or 15.6% as a percentage of revenue • Record project backlog of $1.9 billion at April 30, 2025 • Q1 backlog additions include a 1.2 GW ultra-efficient natural gas-fired project • Solid balance sheet: large cash and net liquidity position; no debt • Paid quarterly ...

Financial Data and Key Metrics Changes - The company reported consolidated revenue growth of 23% to $193.7 million for the first quarter of fiscal 2026, with a gross margin of 19% [6][21] - Net income increased to approximately $22.6 million or $1.6 per diluted share, up from $7.9 million or $0.58 per diluted share year over year [6][24] - EBITDA rose to $30.3 million, representing 15.6% of revenues, compared to $11.9 million or 7.5% for the same period last year [6][25] - The company achieved a record backlog of $1.9 billion as of April 30, 2025, reflecting a 36% increase from January 31, 2025 [7][17] Business Segment Data and Key Metrics Changes - Power Industry Services segment revenues increased by 45% to $160 million, contributing 83% of total revenues, with a pretax book income of approximately $31 million [11] - Industrial Construction Services segment revenues decreased to $29 million from $44 million, contributing 15% of total revenues, with a pretax book income of approximately $2 million [11][12] - Telecommunications Infrastructure Services segment contributed 2% of total revenues, with a gross margin of 18% [13][23] Market Data and Key Metrics Changes - The company noted a substantial increase in power demand, reaching its highest level in two decades, driven by AI data centers, onshoring of manufacturing, and electric vehicle adoption [8][14] - The current project backlog is comprised of approximately 67% natural gas projects and 28% renewable energy projects [14][15] Company Strategy and Development Direction - The company plans to maintain its presence in renewable energy while focusing on natural gas projects as the core growth engine [18][29] - The company aims to leverage its capabilities in constructing both traditional and renewable energy facilities to meet the increasing demand for reliable power [29][30] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the demand environment, expecting attractive project opportunities for the next decade [9][30] - The company highlighted the urgency to meet power consumption increases coinciding with aging infrastructure and underinvestment in energy [29][30] Other Important Information - The company has a strong balance sheet with $546 million in cash and investments, net liquidity of $315 million, and no debt as of April 30, 2025 [9][26] - The board increased the share repurchase program to $150 million, reflecting a disciplined capital allocation strategy [9][28] Q&A Session Summary Question: What does the pipeline look like for the rest of the year? - Management indicated a strong pipeline and expects to add several power industrial jobs, potentially exceeding $2 billion in backlog later this year [35][37] Question: What is the outlook for the Industrial business segment? - Management acknowledged a slight contraction but noted strong interest in the segment, expecting revenues to increase meaningfully over the next several quarters [39] Question: Can you quantify the excess margin from projects like Trumbull? - Management stated that the gross margins reflect strong execution and a favorable project mix, expecting to exceed last year's margin profile [42] Question: Is the current project timeline of three to four years a permanent change? - Management attributed the extended timeline primarily to supply chain issues, indicating that it may not revert to previous timelines [48]

Financial Data and Key Metrics Changes - The company reported consolidated revenue growth of 23% to $193.7 million for Q1 fiscal 2026, with a gross margin of 19% [6][22] - Net income increased to approximately $23 million or $1.6 per diluted share, up from $7.9 million or $0.58 per diluted share year over year [6][23] - EBITDA rose to $30.3 million, representing 15.6% of revenues, compared to $11.9 million or 7.5% in the same period last year [6][24] Business Segment Data and Key Metrics Changes - Power Industry Services segment revenues increased by 45% to $160 million, contributing 83% of total revenues, with a pretax book income of approximately $31 million [11][22] - Industrial Construction Services segment revenues decreased to $29 million from $44 million, contributing 15% of total revenues, with a pretax book income of approximately $2 million [11][22] - Telecommunications Infrastructure Services segment contributed 2% of total revenues, with a gross margin of 18% [13][23] Market Data and Key Metrics Changes - The company reported a record backlog of $1.9 billion as of April 30, 2025, reflecting a 36% increase from January 31, 2025 [7][17] - The backlog is comprised of approximately 67% natural gas projects and 28% renewable projects, indicating a strong demand for both types of energy sources [14][18] Company Strategy and Development Direction - The company is focused on capitalizing on the growing demand for energy infrastructure, particularly in the construction of natural gas and renewable energy facilities [7][28] - The strategy includes maintaining a strong balance sheet, returning capital to shareholders, and exploring M&A opportunities to enhance capabilities [8][27] - The company aims to strengthen its leadership role in energy infrastructure construction, emphasizing disciplined risk management and project execution [29] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the demand environment for energy infrastructure, expecting attractive project opportunities for the next decade [7][28] - The company highlighted the urgency to meet increasing power consumption needs coinciding with aging infrastructure and underinvestment in energy resources [28][29] - Management noted that combined cycle projects typically take three to four years to complete, indicating a long-term growth outlook [30] Other Important Information - The company has a strong liquidity position with $546.5 million in cash and investments, net liquidity of $315 million, and no debt as of April 30, 2025 [8][25] - A quarterly dividend of 37.5¢ was paid, and the share repurchase program was increased to $150 million [8][27] Q&A Session Summary Question: What does the pipeline look like for the rest of the year? - Management indicated a strong pipeline and expects to add several power industrial jobs, potentially exceeding $2 billion in backlog later this year [35][36] Question: What is the outlook for the Industrial business? - Management acknowledged a slight contraction in the previous quarter but expressed confidence in revenue growth due to strong interest in onshoring U.S. manufacturing [38][39] Question: Can you quantify the excess margin from projects like Trumbull? - Management noted that gross margins reflect strong execution and a favorable project mix, expecting to exceed last year's margin profile [42] Question: Is there an optimal backlog level if most of it is natural gas? - Management stated that backlog levels can fluctuate significantly, but they expect an overall increase in backlog throughout the year [43] Question: What is driving the extended project timelines? - Management attributed the longer timelines primarily to supply chain issues, indicating that the current typical timeframe is three to four years [46]

Revenue Performance - For the three months ended April 30, 2025, consolidated revenues increased by 22.8% to $193.7 million compared to $157.7 million for the same period in 2024[93]. - The power industry services segment generated revenues of $160.4 million, a 45.4% increase from $110.3 million in the prior year, representing approximately 82.8% of consolidated revenues[94]. - The industrial construction services segment saw a revenue decrease of 33.2%, down to $29.2 million from $43.7 million year-over-year[96]. Profitability - Gross profit for the three months ended April 30, 2025, was approximately $36.9 million, with a gross profit margin of 19.0%, up from 11.4% in the same period of 2024[99]. - Net income for the three months ended April 30, 2025, was $22.6 million, a 186.1% increase compared to $7.9 million in the same period of 2024[93]. - Selling, General and Administrative Expenses for Q1 2025 were $12.5 million, representing 6.5% of consolidated revenues, compared to $11.4 million and 7.2% in Q1 2024[100]. - Other Income for Q1 2025 increased by 13.6% to $5.4 million from $4.8 million in Q1 2024, attributed to higher investment balances and increased earnings from cash equivalents[101]. - Net income for Q1 2025 was $22.6 million, significantly up from $7.9 million in Q1 2024, leading to an EBITDA of $30.3 million compared to $11.9 million in the prior year[126]. Project Backlog - The project backlog as of April 30, 2025, was $1.9 billion, an increase from $1.4 billion on January 31, 2025[80]. - The industrial construction services segment's project backlog increased to approximately $91.4 million from $53.2 million on January 31, 2025[92]. Cash and Liquidity - Cash and cash equivalents increased to $189.3 million as of April 30, 2025, up by $44.0 million from $145.3 million at January 31, 2025[104]. - Net cash provided by operating activities for Q1 2025 was $35.3 million, with a notable decrease in accounts receivable by $69.3 million[105]. - The company maintained net liquidity of $315.1 million as of April 30, 2025, an increase of $13.7 million from January 31, 2025[110]. - The company has $11.5 million remaining in cash investment commitments related to a solar fund, expected to be fulfilled in Fiscal 2026[120]. Tax and Obligations - The effective income tax rate for Q1 2025 was 24.3%, differing from the statutory federal tax rate of 21% due to state income taxes[102]. - As of April 30, 2025, the estimated amount of unsatisfied bonded performance obligations was approximately $0.6 billion, with additional bonds covering other risks totaling $45.7 million[118]. Future Projects - The company received a notice to proceed for a 1.2 GW combined-cycle natural gas-fired power plant in Texas, with construction expected to begin in summer 2026[85]. - The company entered into an EPC services contract for a 300 MW biofuel power plant in Ireland, with construction commencing in Fiscal 2026[86]. - The company is committed to expanding its capabilities in natural gas-fired power plants and renewable energy projects across the U.S., Ireland, and the U.K.[83]. Financing Activities - The company funded a loan of $5.0 million for the development phase of a natural gas-fired power plant, which remains outstanding[122].

Financial Performance - Argan reported consolidated revenues of $193.7 million for Q1 FY2026, a 23% increase from $157.7 million in Q1 FY2025[2] - The company achieved a gross profit of $36.9 million, resulting in a gross margin of 19.0%, compared to 11.4% in the prior year[7] - Net income for the quarter was $22.6 million, or $1.60 per diluted share, up from $7.9 million, or $0.58 per diluted share, in the same quarter last year[10] - EBITDA increased to $30.3 million, representing 15.6% of revenues, compared to $11.9 million, or 7.5% of revenues, in the prior year[10] Project Backlog and Pipeline - The project backlog reached a record $1.9 billion as of April 30, 2025, driven by new project awards including the Sandow Lakes Power Station[3] - Argan's robust project pipeline reflects increasing energy demand and the need for new energy resources due to aging facilities[4] Cash and Liquidity - Cash, cash equivalents, and investments totaled $546.5 million, an increase from $525.1 million at the end of January 2025[11] - The company maintained net liquidity of $315.1 million, up from $301.4 million at the end of January 2025[11] Expenses and Cost Management - Selling, general and administrative expenses rose to $12.5 million, but as a percentage of revenues, they decreased to 6.5% from 7.2% in the prior year[8] Strategic Commitment - The company remains committed to disciplined growth and strengthening its leadership role in energy infrastructure development[6]

Group 1 - Argan Inc. (NYSE: AGX) has recently achieved impressive results, with its stock value nearly tripling over the past 12 months, reaching a record price [1] - The company specializes in building power plants and industrial facilities, indicating a focus on infrastructure development [1] Group 2 - The article highlights the characteristics of companies that are attractive for investment, including growth in revenue, earnings, and free cash flow, as well as excellent growth prospects and favorable valuations [1] - Preference is given to steadily growing companies with high free cash flow margins, dividend stocks, and those with generous share repurchase programs [1]