Argan, Inc. · NYSE:AGX
Argan — Q2 FY2024 Earnings Presentation
21 slides from Argan's earnings presentation, September 2023
Slide 1: Second Quarter Fiscal 2024 Results Presentation
Second Quarter Fiscal PRESENTATION 2024 Results
Slide 2: Safe Harbor Statement
Safe Harbor Statement All statements in this presentation that are not historical are forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934. Such forward-looking statements may be identified by words such as “believe,” “intend,” “expect,” “may,” “could,”
Slide 3: Q2 2024 Highlights
Q2 2024 Highlights • Power Industry Services revenues increased 15.3% year over year • Earnings per share of $0.94 for the quarter Argan • Backlog remains strong with third consecutive quarter totaling more than Positioned $0.8 billion for Long- • Atlantic Projects Company (APC) received full notice
Slide 4: Argan At-A-Glance
Argan At-A-Glance Power Industry Services Industrial Construction Telecommunications (75%) Services Infrastructure Services (23%) (2%) Building innovative power solutions for the Servicing heavy and light Constructing and connecting transition to low-carbon/zero-carbon emissions: industrial clients,
Slide 5: Well-Positioned in Two Major Segments of the Energy Market: Natural Gas & Renewables
Well-Positioned in Two Major Segments of the Energy Market: Natural Gas & Renewables Benefitting From Strong Industry Tailwinds U.S. electricity generation from selected fuels: Global Trends: AEO2023 Reference case1 • Power consumption is expected to triple by 2050 as electrification and living stan
Slide 6: Project Spotlight: Vistra Energy, Illinois, U.S.
Project Spotlight: Vistra Energy, Illinois, U.S. • Gemma recently received limited notices to proceed on 3 solar and battery storage projects • The converted plants will represent 160 MW of electrical power and 22 MW of energy storage • Gemma will commence early engineering and design activities as
Slide 7: Project Spotlight: Shannonbridge Power Project, Ireland
Project Spotlight: Shannonbridge Power Project, County Offaly, Ireland • APC recently received full notice to proceed on an EPC services contract with GE Vernova for the Shannonbridge Power Project • The 264 MW power plant will feature eight turbine units to enhance the region’s power infrastructure
Slide 8: Enabling the Shift to Low-/Zero-Carbon Emissions
Enabling the Shift to Low-/Zero-Carbon Emissions Industry Drivers • Availability of U.S. natural gas • Growing renewables & need for storage solutions Industrial 17% • Economy and population dependent on reliable and affordable electricity • Aging infrastructure Renewable 83% • Technology advancemen
Slide 9: Consolidated Financial Results
Consolidated Financial Results Three Months Ended Six Months Ended July 31, July 31, ($ in millions, except per share amounts) 2023 2022 2023 2022 Revenues $141 $118 $245 $ 218 Gross Profit $24 $24 $38 $44 Gross margin % 16.8% 20.6% 15.5% 20.2% SG&A $11 $11 $21 $22 Net Income $13 $4 $15 $12 Diluted
Slide 10: Solidified Project Backlog
Solidified Project Backlog 1000 900 $870 $822 $824 22 800 116 317 $714 $806 700 60 600 335 $ Millions 500 673 567 400 531 496 300 331 200 100 124 113 140 54 45 2 2 3 2 1 0 FY2021 FY2022 FY2023 1Q2024 2Q2024 Telecom Industrial Power Non-RUPO • Remaining Unsatisfied Performance Obligations (“RUPO”) is
Slide 11: Strong Backlog Composition
Strong Backlog Composition Project Estimated Business Segment Project Description Location Size Start Completion • Natural gas-fired combined cycle power station Trumbull Energy Center • 2 gas-fired turbines with heat recovery steam generators Ohio 950 MW Nov 2022 2026 and one steam turbine • Larges
Slide 12: Balance Sheet Strength
Balance Sheet Strength Balance Sheet Data July 31, 2023 January 31, 2023 Cash, cash equivalents, and investments $346 M $325 M Net liquidity1 (working capital) $240 M $236 M Debt Nil Nil Shareholders’ equity $285 M $281 M Shares outstanding 13,354,000 13,442,000 1 Total current assets minus total cu
Slide 13: Fiscal 2024 YTD Net Liquidity Bridge
Fiscal 2024 YTD Net Liquidity Bridge Flexible business model with minimal capital expenditures $260 $14.9 Given the variability of $240 $236.2 ($6.7) $1.8 $239.5 ($6.7) our cash balance due to prepayments and the $220 cash cycle of our long- term projects, we Millions $200 believe net liquidity $180
Slide 14: Returning Capital
Returning Capital Since November 2021, Argan To date, Since Fiscal 2017, has returned a total of Argan has repurchased Argan has paid $1.00 per share $95.3 million 2.6 million shares annually$6.9M to shareholders through our at an average price of through regular quarterly share repurchase program i
Slide 15: Long-Term Value Creation
Long-Term Value Creation Tangible Book Value1 & Cumulative Dividends Per Share 1H2024 $19.07 $12.75 FY2023 $18.62 $12.25 FY2022 $19.34 $11.25 FY2021 $18.38 $10.25 FY2020 $19.59 $7.25 $12.25 FY2019 $22.83 $6.25 FY2018 $20.34 $5.25 FY2017 $16.08 $4.25 FY2016 $11.58 $3.25 FY2015 $11.29 $2.55 FY2014 $9.
Slide 16: Healthy Momentum Across Business
Healthy Momentum Across Business • Strong & diversified backlog across business Stable & Diverse Backlog • APC received full notice to proceed on Shannonbridge project • Gemma received limited notices to proceed on Vistra solar and battery projects • Increased revenues from multiple international $8
Slide 17: Long-Term Growth Strategy
Long-Term Growth Strategy Organic growth and thoughtful expansion via M&A Partner of choice for growth in low and net zero carbon power generation Disciplined risk management Leverage core platform to address market opportunity 17
Slide 18: Q&A
Q&A
Slide 19: Appendix
APPENDIX
Slide 20: Reconciliation of Consolidated Net Income to EBITDA
Reconciliation of Consolidated Net Income to EBITDA Three Months Ended Six Months Ended July 31, July 31, ($ in thousands) 2023 2022 2023 2022 Net income, as reported $12,767 $ 4,222 $14,876 $ 11,707 Income tax expense 4,592 9,686 5,487 11,959 Depreciation 488 747 1,035 1,556 Amortization of purchas
Slide 21: Business Segments
Business Segments Industrial Construction Telecommunications Power Industry Services Services Infrastructure Services 75% 23% 2% Revenues: $105M Revenues: $33M Revenues: $3M Pre-Tax Income: Pre-Tax Income: Pre-Tax Income: $16.3M $3.2M $0.1M Growth Drivers: Growth Drivers: Growth Drivers: • Electrifi