Argan(US:AGX)2024-09-05 20:29Project Backlog and Development - As of July 31, 2024, the consolidated project backlog amounted to $1.0 billion, an increase from $0.8 billion as of January 31, 2024[94] - Approximately 55.0% of the project backlog is related to renewable energy projects, with revenues from these projects accounting for 40.6% and 35.7% of the power industry services segment for the three and six months ended July 31, 2024, respectively[96] - TRC's project backlog was approximately $92 million as of July 31, 2024, down from $128 million on January 31, 2024, while revenues for the six months ended July 31, 2024, increased to $93.3 million from $63.1 million in the prior year[109] - The company is committed to constructing state-of-the-art natural gas-fired power plants, with significant business development efforts directed towards utility-scale solar fields and other renewable energy projects[96] - The company received full notice to proceed for the Trumbull Energy Center, a 950 MW natural gas-fired power plant, with completion scheduled for early 2027[100] - In June 2024, the company entered into a subcontract for a liquified natural gas facility in Louisiana, with project completion expected in early 2026[101] - The 405 MW Midwest Solar Project is set to utilize solar-tracking panels and is scheduled for completion in the first half of the fiscal year ending January 31, 2027[102] - The company has recognized an estimated contract loss of approximately $12.8 million related to the Kilroot Project, which was terminated on May 3, 2024[108] Financial Performance - Consolidated revenues for the three months ended July 31, 2024, were $227.0 million, an increase of $85.7 million, or 60.6%, from $141.3 million in the same period of 2023[137] - Revenues from the power industry services segment increased by 64.9%, or $68.4 million, to $173.8 million for the three months ended July 31, 2024, compared to $105.3 million for the same period in 2023[138] - The power industry services segment accounted for approximately 76.5% of consolidated revenues for the quarter ended July 31, 2024, compared to 74.5% in the prior year[138] - Revenues from the industrial construction services segment increased by $16.9 million, or 51.6%, to $49.6 million for the three months ended July 31, 2024, compared to $32.8 million in the same period of 2023[140] - Consolidated revenues for the six months ended July 31, 2024, were $384.7 million, an increase of 57.0% from $245.0 million in the same period last year[152] - Power industry services revenue increased by 61.8% to $284.0 million for the six months ended July 31, 2024, representing 73.8% of consolidated revenues[153] Profitability Metrics - Gross profit for the three months ended July 31, 2024, was $31.1 million, representing a 31.0% increase from $23.7 million in the same period of 2023[136] - Income from operations for the three months ended July 31, 2024, was $18.7 million, a 41.1% increase from $13.2 million in the same period of 2023[136] - Net income for the three months ended July 31, 2024, was $18.2 million, an increase of $5.4 million, or 42.5%, from $12.8 million in the same period of 2023[136] - Gross profit for the three months ended July 31, 2024, was approximately $31.1 million, an increase from $23.7 million in the same period last year[143] - Gross profit percentage declined to 13.7% for the three months ended July 31, 2024, down from 16.8% in the prior year, primarily due to a changing mix of projects[144] - Net income for the three months ended July 31, 2024, was $18.2 million, or $1.31 per diluted share, compared to $12.8 million, or $0.94 per diluted share, in the prior year[150] - Other income, net, for the six months ended July 31, 2024, was $10.4 million, reflecting a significant increase from $3.5 million in the prior year[161] - EBITDA for the six months ended July 31, 2024, was $36.7 million, compared to $21.6 million for the same period in 2023, reflecting a 69.9% increase[184] Costs and Expenses - The cost of revenues for the three months ended July 31, 2024, was $195.9 million, an increase of $78.3 million, or 66.6%, from $117.6 million in the same period of 2023[136] - Consolidated cost of revenues rose to $195.9 million for the three months ended July 31, 2024, representing a 66.6% increase from $117.6 million in the prior year[142] - Selling, General and Administrative Expenses were $12.4 million for the three months ended July 31, 2024, representing 5.5% of consolidated revenues, down from 7.4% in the prior year[146] Market and Economic Outlook - The U.S. Energy Information Administration projects that electricity demand will grow significantly through 2050, driven by economic growth and increasing electrification[111] - The share of electricity generation from utility-scale solar and wind facilities rose to 15% in 2023, with expectations for continued growth in renewable capacity due to declining costs and government incentives[114] - The next capacity auction for the 2026/2027 delivery year is scheduled for December 2024, following a significant price increase in the most recent auction to approximately $269.92/MW-day[126] - The U.S. had 94 operating commercial nuclear reactors at 54 nuclear power plants as of April 2024, with an average age of approximately 42 years[119] Liquidity and Financial Position - Net liquidity increased by $14.9 million to $259.8 million as of July 31, 2024, primarily due to net income for the period[170] - The New Credit Agreement reduces the base lending commitment amount from $50.0 million to $35.0 million, with an accordion feature allowing an additional commitment of $30.0 million[171] - As of July 31, 2024, the estimated amounts of the Company's unsatisfied bonded performance obligations was approximately $0.3 billion, with outstanding bonds covering other risks at $19.9 million[178] - The New Credit Agreement requires compliance with certain financial covenants, including achieving positive adjusted EBITDA over each rolling twelve-month period[176] - As of July 31, 2024, there were no borrowings outstanding under the New Credit Agreement, indicating a strong liquidity position[175] - The Company believes that cash on hand and cash equivalents will be adequate to meet general business needs in the foreseeable future[181] - The Company has pledged the majority of its assets to secure financing arrangements, providing flexibility in managing credit requirements[176] - There have been no material changes to the Company's market risks during the six months ended July 31, 2024[192]