Argan, Inc. (NYSE: AGX) today announced financial results for the
three months ended April 30, 2014.
For the quarter ended April 30, 2014, revenues were $51.2 million
compared to $46.6 million for the three months ended April 30, 2013.
Gemma Power Systems LLC and affiliates (Gemma) contributed $49.8
million, or 97% of revenues in the first quarter of fiscal 2015,
compared to $43.8 million, or 94% of revenues in the first quarter of
fiscal 2014.
Argan reported consolidated EBITDA (Earnings before interest, taxes,
depreciation and amortization) associated with the stockholders of
Argan, Inc. of $5.6 million for the quarter ended April 30, 2014
compared to $10.0 million for the quarter ended April 30, 2013. Gemma
recorded $6.8 million in EBITDA associated with the stockholders of
Argan, Inc. for the first quarter of fiscal 2015 compared to $11.1
million for the first quarter of fiscal 2014.
Net income attributable to the stockholders of Argan, Inc. for the first
quarter of fiscal 2015 was $3.5 million, or $0.24 per diluted share
based on 14,683,000 diluted shares outstanding, compared to net income
attributable to the shareholders of Argan, Inc. for the first quarter of
fiscal 2014 of $6.4 million, or $0.45 per diluted share based on
14,127,000 diluted shares outstanding.
Gemma’s backlog as of April 30, 2014 was $742 million. The April 30,
2014 backlog includes two large gas fired power plants being constructed
for Panda Power Funds in Pennsylvania and a biomass-fired plant in Texas.
Commenting on Argan’s financial results, Rainer Bosselmann, Chairman and
Chief Executive Officer stated, “Gemma’s performance on the initial
phases of the two gas fired power plants being constructed in
Pennsylvania has been excellent. Despite adverse winter weather
conditions, we are pleased with the progress made to date. Construction
activity will increase significantly over the next several quarters.”
About Argan, Inc.
Argan’s primary business is designing and building energy plants through
its Gemma Power Systems subsidiary. These energy plants include
traditional gas as well as alternative energy including biodiesel,
ethanol, and renewable energy sources such as wind and solar power.
Argan also owns Southern Maryland Cable, Inc.
Certain matters discussed in this press release may constitute
forward-looking statements within the meaning of the federal securities
laws and are subject to risks and uncertainties including, but not
limited to: (1) the Company’s ability to achieve its business strategy
while effectively managing costs and expenses; (2) the Company’s ability
to successfully and profitably integrate acquisitions; and (3) the
continued strong performance of the energy sector. Actual results and
the timing of certain events could differ materially from those
projected in or contemplated by the forward-looking statements due to a
number of factors detailed from time to time in Argan’s filings with the
Securities and Exchange Commission. In addition, reference is
hereby made to cautionary statements with respect to risk factors set
forth in the Company’s most recent reports on Form 10-K and 10-Q, and
other SEC filings.
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ARGAN, INC. AND SUBSIDIARIES
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CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
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(Unaudited)
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Three Months Ended April 30,
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2014
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2013
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REVENUES
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Power industry services
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$
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49,824,000
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$
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43,769,000
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Telecommunications infrastructure services
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1,367,000
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2,879,000
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Revenues
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51,191,000
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46,648,000
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Cost of revenues
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Power industry services
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40,049,000
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31,246,000
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Telecommunications infrastructure services
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1,091,000
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2,374,000
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Cost of revenues
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41,140,000
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33,620,000
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GROSS PROFIT
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10,051,000
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13,028,000
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Selling, general and administrative expenses
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3,379,000
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3,443,000
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Income from operations
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6,672,000
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9,585,000
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Other income, net
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22,000
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155,000
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Gain on deconsolidation of variable interest entity
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--
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1,120,000
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INCOME BEFORE INCOME TAXES
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6,694,000
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10,860,000
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Income tax expense
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1,894,000
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3,920,000
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NET INCOME
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4,800,000
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6,940,000
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INCOME ATTRIBUTABLE TO NONCONTROLLING INTERESTS
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1,325,000
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530,000
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NET INCOME ATTRIBUTABLE TO THE STOCKHOLDERS OF ARGAN, INC.
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$
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3,475,000
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$
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6,410,000
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NET INCOME PER SHARE ATTRIBUTABLE TO THE STOCKHOLDERS OF ARGAN,
INC.
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Basic
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$
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0.24
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$
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0.46
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Diluted
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$
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0.24
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$
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0.45
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WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING
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Basic
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14,299,000
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13,974,000
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Diluted
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14,683,000
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14,127,000
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ARGAN, INC. AND SUBSIDIARIES
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RECONCILIATIONS TO EBITDA (Unaudited)
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Consolidated Operations
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Three Months Ended April 30,
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2014
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2013
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Net income, as reported
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$
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4,800,000
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$
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6,940,000
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(Income) - noncontrolling interests
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(1,325,000
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)
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(530,000
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Interest expense
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--
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(161,000
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)
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Income tax expense
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1,894,000
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3,591,000
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Depreciation
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142,000
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129,000
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Amortization of purchased intangible assets
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60,000
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61,000
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EBITDA associated with the stockholders of Argan, Inc.
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$
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5,571,000
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$
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10,030,000
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Power Industry Services
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Three Months Ended April 30,
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2014
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2013
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Income before income taxes
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$
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8,009,000
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$
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11,982,000
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(Income) - noncontrolling interests
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(1,325,000
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)
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(859,000
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Interest expense
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--
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(161,000
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Depreciation
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96,000
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83,000
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Amortization of purchased intangible assets
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60,000
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61,000
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EBITDA associated with the stockholders of Argan, Inc.
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$
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6,840,000
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$
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11,106,000
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Management uses EBITDA, a non-GAAP financial measure, for planning
purposes, including the preparation of operating budgets and to
determine appropriate levels of operating and capital investments.
Management believes that EBITDA provides additional insight for analysts
and investors in evaluating the Company's financial and operational
performance and in assisting investors in comparing the Company's
financial performance to those of other companies in the Company's
industry. However, EBITDA is not intended to be an alternative to
financial measures prepared in accordance with GAAP and should not be
considered in isolation from our GAAP results of operations. Pursuant to
the requirements of SEC Regulation G, a reconciliation between the
Company's GAAP and non-GAAP financial results is provided above and
investors are advised to carefully review and consider this information
as well as the GAAP financial results that are presented in the
Company's SEC filings.
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ARGAN, INC. AND SUBSIDIARIES
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CONSOLIDATED BALANCE SHEETS
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April 30, 2014
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January 31, 2014
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ASSETS
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(Unaudited)
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(Note 1)
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CURRENT ASSETS:
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Cash and cash equivalents
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$
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313,761,000
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$
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272,209,000
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Accounts receivable, net of allowance for doubtful accounts
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28,684,000
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23,687,000
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Costs and estimated earnings in excess of billings
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200,000
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527,000
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Prepaid expenses
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2,749,000
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1,581,000
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Deferred income tax assets
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--
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178,000
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Other current assets
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2,312,000
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377,000
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TOTAL CURRENT ASSETS
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347,706,000
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298,559,000
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Property, plant and equipment, net of accumulated depreciation
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4,107,000
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4,183,000
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Goodwill
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18,476,000
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18,476,000
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Intangible assets, net of accumulated amortization
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2,028,000
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2,088,000
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TOTAL ASSETS
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$
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372,317,000
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$
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323,306,000
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LIABILITIES AND EQUITY
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CURRENT LIABILITIES:
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Accounts payable
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$
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25,677,000
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$
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22,589,000
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Accrued expenses
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3,630,000
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7,911,000
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Deferred income tax liabilities
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819,000
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--
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Billings in excess of costs and estimated earnings
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177,517,000
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134,736,000
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TOTAL CURRENT LIABILITIES
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207,643,000
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165,236,000
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Deferred income tax liabilities
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372,000
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293,000
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TOTAL LIABILITIES
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208,015,000
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165,529,000
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COMMITMENTS AND CONTINGENCIES
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STOCKHOLDERS’ EQUITY:
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Preferred stock, par value $0.10 per share – 500,000 shares
authorized; no shares issued and outstanding
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--
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--
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Common stock, par value $0.15 per share – 30,000,000 shares
authorized; 14,372,634 and 14,289,134 shares issued at April 30
and January 31, 2014, respectively; 14,369,401 and 14,285,901
shares outstanding at April 30 and January 31, 2014, respectively
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2,156,000
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2,143,000
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Additional paid-in capital
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102,575,000
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100,863,000
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Retained earnings
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56,810,000
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53,335,000
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Treasury stock, at cost – 3,233 shares at April 30 and January 31,
2014
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(33,000
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(33,000
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TOTAL STOCKHOLDERS’ EQUITY
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161,508,000
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156,308,000
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Noncontrolling interests
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2,794,000
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1,469,000
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TOTAL EQUITY
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164,302,000
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157,777,000
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TOTAL LIABILITIES AND EQUITY
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$
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372,317,000
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$
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323,306,000
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Note 1 – The condensed consolidated balance sheet as of January
31, 2014 has been derived from audited consolidated financial statements.
Copyright Business Wire 2014