Safe Harbor Statement

Similar documents
AGAN, INC. June June 2011

AGAN, INC. June June 2011

AGAN, INC. June June 2011

AGAN, INC. June June 2011

Argan, Inc. Reports Year-End and Fourth Quarter Results

Argan, Inc. Reports Second Quarter Results

Argan, Inc. Reports First Quarter Results

Argan, Inc. Reports Fourth Quarter and Year End Results

ARGAN, INC. REPORTS THIRD QUARTER EARNINGS

Argan, Inc. Reports Year-End and Fourth Quarter Results

Argan, Inc. Reports First Quarter Results

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C FORM 10 Q

Argan Inc. (NYSE: AGX) $29.97

Reconciliation of Non-GAAP Measures

Coverage Andres Emmett Diz Senior Analyst

Reconciliation of Non-GAAP Measures

MIC. Fourth Quarter 2017 Earnings Conference Call Support Slides. February 2018

PRIM Q Earnings Call May 8th, 2018

Three Months Ended Twelve Months Ended 12/31/ /31/ /31/ /31/

Primoris Services Corporation Announces 2018 Third Quarter Financial Results

Third Quarter 2016 Supplementary Slides

First Quarter Fiscal Year 2018 Conference Call. February 2, 2018

Corporate Presentation. March 5, 2016 NYSE: MTZ

Investor Presentation May Alaskan Way Viaduct (SR 99) Replacement Project, Seattle

PSEG ANNOUNCES 2018 RESULTS NET INCOME OF $2.83 PER SHARE NON-GAAP OPERATING EARNINGS OF $3.12 PER SHARE

ACQUISITION AND INTEGRATION EXPENSES - 19,

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES 170, ,985 41,506 45,195 86,702 44, ,068 46, ,219 45,556 46,792 92,348 50, ,820

4 th Quarter 2018 Earnings Release Conference Call

3 rd Quarter 2018 Earnings Release Conference Call

Investor Presentation December Alaskan Way Viaduct (SR-99) Replacement Project, Seattle

D.A. Davidson & Co. Engineering & Construction Conference September 20, 2017 Chicago, IL

Primoris Services Corporation Announces 2017 Fourth Quarter and Full Year Financial Results

Reconciliation of key non-gaap consolidated financial metrics to Legacy Cypress metrics. Three months ended March 29, 2015 Impact of the merger and

Contact: Marybeth Flater FOR IMMEDIATE RELEASE Exelon Investor Relations

CPSI Announces Third Quarter 2018 Results

CIRCOR Reports Fourth-Quarter and Year-End 2013 Financial Results

NYSE: WES, WGP

Digital River, Inc. Second Quarter Results (Unaudited, in thousands) Subject to reclassification

Media Contact: Meghan Dotter Investor Contact: Ahmed Pasha

Investor Presentation February Alaskan Way Viaduct (SR 99) Replacement Project, Seattle

Industry Update Heavy Construction Q4 2017

Building America's Infrastructure

WELLS FARGO PIPELINE, MLP & UTILITY SYMPOSIUM

FOURTH-QUARTER AND FULL-YEAR 2015 EARNINGS. Feb. 22, 2016

2018 SECOND QUARTER FINANCIAL RESULTS

JABIL CIRCUIT, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS

NCI Building Systems Reports Strong Second Fiscal Quarter 2016 Results

Valero Energy Reports Third Quarter 2018 Results

Jacobs Engineering Group Inc. (Exact name of Registrant as specified in its charter)

PITNEY BOWES ANNOUNCES SECOND QUARTER 2013 RESULTS

Williams and Williams Partners 2 nd Quarter Earnings Call August 2, 2018

Comfort Systems USA (NYSE: FIX) November 13, 2012

Salesforce.com delivered the following results for its fourth quarter and full fiscal year 2010:

SJW GROUP ANNOUNCES 2017 SECOND QUARTER FINANCIAL RESULTS

CLARCOR REPORTS FOURTH QUARTER FINANCIAL RESULTS

2017 Fourth Quarter and Full Year Results. Maracay Homes Pardee Homes Quadrant Homes Trendmaker Homes TRI Pointe Homes Winchester Homes

2016 Second Quarter Results. Maracay Homes Pardee Homes Quadrant Homes Trendmaker Homes TRI Pointe Homes Winchester Homes

Investor Presentation February Alaskan Way Viaduct (SR 99) Replacement Project, Seattle

MASCO CORP /DE/ FORM 8-K. (Current report filing) Filed 02/09/15 for the Period Ending 02/09/15

Itron, Inc. Comparison of Key 2015 Financial Metrics to Preliminary Results Announced February 17, Total operating expenses 486, ,839

EXELON ANNOUNCES FIRST QUARTER 2014 RESULTS

Non-GAAP Financial Measures

Brooks Automation, Inc. Financial Results Conference Call

Digital River, Inc. Fourth Quarter Results (In thousands, except share data) Subject to reclassification

Granite Point Mortgage Trust Inc. Reports Fourth Quarter 2017 Financial Results and Post-Quarter End Business Update

The Chemours Company. Quarterly Financial Information. May 4, 2018

Salesforce.com Announces Fiscal 2013 Fourth Quarter and Full Year Results

Digital River, Inc. First Quarter Results (In thousands, except share data) Subject to reclassification

Cash Interest. Adjusted EBITDA Reconciliations

2

EXELON ANNOUNCES FIRST QUARTER 2015 RESULTS

3Q Presentation. November 7, 2017

Valmont Industries, Inc. Investor Presentation INVESTOR PRESENTATION

2017 Third Quarter Results. Maracay Homes Pardee Homes Quadrant Homes Trendmaker Homes TRI Pointe Homes Winchester Homes

DANA HOLDING CORPORATION Quarterly Financial Information and Reconciliations of Non-GAAP Financial Measures

Jefferies 6th Global Clean Technology Conference

Reconciliation of Non-GAAP Financial Measures. Adjusted Operating Income Reconciliation

CB&I Investor Presentation KeyBanc Capital Markets Industrial, Automotive & Transportation Conference June 2016

MIC. Third Quarter 2017 Earnings Conference Call Support Slides. November 2017

Second Quarter Financial Results 2018

Stifel 2017 Industrials Conference

Mar. 31, Jun. 30, 2017

2017 First Quarter Results. Maracay Homes Pardee Homes Quadrant Homes Trendmaker Homes TRI Pointe Homes Winchester Homes

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC FORM 8-K. Masco Corporation (Exact name of Registrant as Specified in Charter)

2015 Fourth Quarter and Full Year Results. Maracay Homes Pardee Homes Quadrant Homes Trendmaker Homes TRI Pointe Homes Winchester Homes

Investor Presentation. May 2010

MIC First Quarter 2017 Earnings Conference Call Support Slides. May 2017

The LGL Group, Inc. Reports Q Financial Results

2

Telephone Facsimile Internet:

A leading provider of post acute services

2018 Evercore ISI Utility CEO Conference January 11, 2018

CFO Commentary on Third-Quarter 2014 Results

The AES Corporation Acquisition of DPL Inc. April 20, 2011

TD AMERITRADE HOLDING CORPORATION CONSOLIDATED STATEMENTS OF INCOME In thousands, except per share amounts (Unaudited)

EXELON REPORTS THIRD QUARTER 2017 RESULTS

News. CB&I Reports Strong 2013 Third Quarter Results

Clean Energy Reports 75.2 Million Gallons Delivered and Revenue of $85.8 Million for First Quarter of 2015

CB&I Reports 2015 Third Quarter Results

Consolidated Communications Reports Third Quarter 2017 Results

Transcription:

April 2019

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, would, will, should, plan, project, contemplate, anticipate, or similar statements. Because these statements reflect the current views of Argan, Inc. ( Argan or the Company ) concerning future events, these forward-looking statements are subject to risks and uncertainties. Argan s actual results could differ materially from those anticipated in these forward-looking statements as a result of many factors, which are described under the caption Risk Factors in Argan s most recent Form 10-K filed with the Securities and Exchange Commission. Argan undertakes no obligation to update publicly any forward-looking statements contained in this presentation. 2

Company Overview 3 NYSE: AGX Holding company for four 100% controlled subsidiaries Market capitalization (4/8/19) $0.8 billion Strong annual rate of return 5/3/1yr = 16%/18%/21%* Quarterly dividend $0.25 per share January 31, 2019 (in millions) Quarter Ended Year Ended Revenues $ 88 $ 482 Net Income** (2) 52 EBITDA** (1) 52 Strong balance sheet at 1/31/19 No leverage Cash & short-term investments - $297 million Net liquidity - $335 million Project backlog (1/31/19) $1.1 billion * As of 4/8/2019 ** Attributable to the Stockholders of AGX

Business Overview Holding Company 4 Gemma Power Systems ( GPS ) provides engineering, procurement and construction ( EPC ) services to power generation and renewable energy markets The Roberts Company ( TRC ) is principally an industrial steel fabricator and field services provider serving both light and heavy industrial organizations Atlantic Projects Company ( APC ) provides turbine, boiler, large rotating equipment installation, commissioning and outage services to the global power industry SMC Infrastructure Solutions ( SMC ) provides telecommunications data infrastructure services 2019 Revenues by Subsidiary 21.1% 23.4% 2.6% 52.9%

$ Millions Revenues* $900 $893 $800 $700 $600 $675 $500 $400 $413 $482 $300 $383 $200 $279 $227 $100 $142 $- 2012 2013 2014 2015 2016 2017 2018 2019 5 With several major projects completed in the year ended January 31, 2019, we expect our revenues and several other financial metrics to be lower in the first half of Fiscal 2020 compared to prior years.

$ Millions Net Income* $80 $70 $70.3 $72.0 $60 $50 $52.0 $40 $30 $40.1 $30.4 $36.3 $20 $23.3 $10 $- $9.3 2012 2013 2014 2015 2016 2017 2018 2019 6 * Attributable to the Stockholders of AGX

$ Millions EBITDA* $120 $100 $110.6 $116.1 CAGR 22% $80 $60 $66.3 $62.9 $52.2 $52.5 $40 $37.7 $20 $12.9 $- 2012 2013 2014 2015 2016 2017 2018 2019 7 * Attributable to the Stockholders of AGX

Book Value $30.00 Tangible Book Value* & Cumulative Dividends Per Share $25.00 $6.25 $5.25 $20.00 $4.25 $15.00 $10.00 $1.85 $2.55 $3.25 $20.34 $22.83 $5.00 $0.50 $5.87 $1.10 $7.16 $9.50 $11.29 $11.58 $16.08 $- 2012 2013 2014 2015 2016 2017 2018 2019 8 Tangible Book Value Cumulative Dividends *Tangible Book Value = Total Stockholders Equity Goodwill Other Intangible Assets

Annual Financial Results (in thousands, except per share data) January 31, 2019 2018 Change % Change For the Fiscal Year Ended: Revenues $ 482,153 $ 892,815 $ (410,662) (46.0)% Gross profit 82,438 149,325 (66,887) (44.8) Gross margins 17.1% 16.7% 0.4% 2.2 Net Income attributable to stockholders of the Company $ 52,036 $ 72,011 $ (19,975) (27.7) Diluted per share 3.32 4.56 (1.24) (27.2) EBITDA attributable to stockholders of the Company 52,478 116,101 (63,623) (54.8) Diluted per share 3.34 7.36 (4.02) (54.6) As of: Cash, cash equivalents and short-term investments $ 296,531 $ 434,015 $ (137,484) (31.7)% Net Liquidity (1) 334,072 301,817 32,255 10.7 Project backlog 1,094,000 379,000 715,000 188.7 9 (1) We define Net Liquidity, or working capital, as our total current assets less our total current liabilities.

Annual Financial Drivers As construction activity on four large natural gas-fired power plant would down during the current year, consolidated revenues for Fiscal 2019 declined to $482.2 from $892.8 million for Fiscal 2018 when the construction activity on all of these projects were at peak or near-peak levels. However, we are encouraged by the growth in the revenues of our other operating units (TRC, APC, and SMC) which more than doubled during the current fiscal year compared to the prior fiscal year. Gross profits decreased reflecting primarily the reduction in consolidated revenues between periods. Our gross margin percentage increased year over year, reflecting favorable project close-out adjustments to the gross profits of certain projects that have reached final completion. We completed a yearlong detailed review of the activities performed by its engineering staff on major EPC services projects in order to identify and quantify the amounts of research and development credits ( R&D ). Based on this review, we booked a $16.6 million tax benefit in the current year. The Tax Cuts and Jobs Act had a favorable impact on our tax rate, resulting in an annual effective income tax rate of 30% for the current year (before R&D), compared to 36% for the prior year. Our balance sheet remains strong. As of January 31, 2019, our cash, cash equivalents and short-term investments totaled $297 million and adjusted net liquidity was $334 million; plus, we had no bank debt. Our project backlog strengthened to $1.1 billion as of January 31, 2019 from $379 million at the end of the prior year, as we entered three EPC services contracts (two reflected in backlog) to construct state-of-the-art natural gas-fired power plants. 10

Overview of Gemma Power Systems 11 History acquired by Argan in December 2006 for $33 million and has generated cumulative EBITDA since acquisition of over $630 million, or ~19x cash on cash and an IRR in excess of 74% Business engineering, procurement and construction of natural gasfired and alternative power energy facilities throughout the United States Track Record Installed and under-contract capacity for 15 gigawatts of mostly domestic power-generating capacity including 65 gas turbines comprising 40 projects Safety Record 10 million safe hours achieved over the past seven years. Gemma s OSHA recordable injury rate is significantly below the national average Employees Over 20% of staff employees are veterans Customers Independent power producers and utilities

Extensive Project Portfolio 12 Power facilities combined cycle solution Caithness Moxie Freedom Generating Plant CPV Towantic Energy Center NTE Kings Mountain Energy Center NTE Middletown Energy Center Panda Liberty Energy Project Panda Patriot Energy Project Colusa Generating Station Roseville Energy Park Hines PB-2 Power Project Rowan County Power Project Effingham County Power Project Richmond County Phase II Power Project Dighton Power Project Pollution solutions Brayton Point Power Station La Rosita SCR Project Biomass power facilities - Woodville, Texas Solar facilities - Canton, MA - Carver, MA - Beaumont Solar Power facilities simple cycle solution Exelon West Medway II Facility CPV Sentinel Energy Project A.L. Pierce Re-powering Project Vandolah Power Project DeSoto County Power Project Indigo Energy Facility Larkspur Energy Facility Richmond County Phase I Power Monroe Power Project Richland Peaking Project Rocky Road Unit 4 Project Broad River Energy Center Middletown, CT Project Process facilities biodiesel Renewable BioFuels Port Neches Galena Park Green Earth Fuels Houston LLC Process facilities ethanol Carleton Ethanol Facility Wind Facilities - LaSalle County, Illinois - Vantage, Washington - Henry County, Illinois - Ebensburg, Pennsylvania

Construction Services Peer Group Stock 12 Month LTM LTM Return Price Total Market Debt/ LTM Gross EBITDA on Avg. Ticker Company Name 3 /15 /2 0 19 Return Cap Equity Revenue Margin Margin Equity AGX Argan, Inc. $49.34 % 24.9 % $768.3 0.0 X $564.1 17.0 % 10.2 % 16.4% FLR Fluor Corporation $37.74-32.9 $5,268.8 0.5 $19,166.6 3.5 3.9 6.8 GVA Granite Construction Incorporated $46.06-23.6 $2,150.5 0.3 $3,318.4 11.7 6.9 3.5 JEC Jacobs Engineering Group Inc. $73.81 24.3 $10,297.7 0.5 $16,284.4 18.8 5.9 4.4 KBR KBR, Inc. $19.05 18.4 $2,686.3 0.7 $4,913.0 9.3 7.2 18.9 MDR McDermott International Inc. $7.89-65.1 $1,426.5 3.3 $6,705.0 9.0 4.6 NEG ORN Orion Group Holdings, Inc. $4.15-43.4 $120.2 0.4 $583.9 12.0 6.0 4.2 TPC Tutor Perini Corporation $18.51-17.4 $927.4 0.4 $4,454.7 10.2 5.4 4.8 PRIM Primoris Services Corporation $22.61-14.0 $1,146.7 0.6 $2,939.5 11.1 7.6 13.3 TSX-SNC SNC-Lavalin Group Inc. $35.69-35.3 $6,265.5 1.0 $10,084.0 5.6 5.5 NEG STRL Sterling Construction Co. Inc. $13.22 5.1 $352.2 0.5 $1,037.7 10.6 4.4 15.8 Mean -14.5% 0.8x 10.8% 6.1% 9.0% NEG: Negative 13 Source: Stifel - Engineering, Construction and Infrastructure Newsletter (3/19/2019)

Investment Summary Consistent strong operational performance Excellent safety record Large bidding pipeline Strong balance sheet - substantial liquidity and no leverage Strong annual rate of return 5yr/3yr/1yr = 16%/18%/21%* Quarterly dividend of $0.25 per share in fiscal year 2019, for an annual total of $1.00 per share Experienced management team 14 *As of 4/8/2019

Corporate Data Investor Relations Investor Relations 301-315-0027 info@arganinc.com Corporate Headquarters Argan, Inc. One Church Street, Suite 201 Rockville, Maryland 20850 301-315-0027 NYSE Listing Common: AGX Websites Argan, Inc. www.arganinc.com Gemma Power Systems www.gemmapower.com The Roberts Company www.robertscompany.com Atlantic Projects Company www.atlanticprojects.com SMC Infrastructure Solutions www.smcinc.biz 15

Appendix Consolidated Income Statements - Year (in thousands except per share amounts) Years Ended Janaury 31, Revenues $ 482,153 $ 892,815 $ 675,047 Cost of revenues 399,715 743,490 528,336 Gross Profit 82,438 149,325 146,711 Gross Profit % 17.1% 16.7% 21.7% Impairment loss 1,491 584 1,979 Selling, general and administrative expenses 40,710 41,763 32,478 Income from operations 40,237 106,978 112,254 Other income, net 6,981 5,648 2,278 Income before income taxes 47,218 112,626 114,532 Income tax (benefit) expense (4,651) 40,280 37,106 Net Income 51,869 72,346 77,426 Net (loss) income attributable to noncontrolling interests (167) 335 7,098 Net income attributable to the stockholders of AGX $ 52,036 $ 72,011 $ 70,328 EPS attributable to the stockholders of Argan, Inc. Basic $ 3.34 $ 4.64 $ 4.67 Diluted $ 3.32 $ 4.56 $ 4.50 2019 2018 2017 16 Weighted average number of shares outstanding Basic Diluted 15,569 15,522 15,066 15,693 15,780 15,625 Cash dividends per share $ 1.00 $ 1.00 $ 1.00

Appendix Consolidated Income Statements - Quarter (in thousands except per share amounts) Three Months Ended 31-Jan-19 31-Oct-18 31-Jul-18 30-Apr-18 31-Jan-18 Revenues $ 87,658 $ 116,459 $ 136,670 $ 141,366 $ 169,578 Cost of revenues 80,912 86,927 105,962 125,914 149,474 Gross Profit 6,746 29,532 30,708 15,452 20,104 Gross Profit % 7.7% 25.4% 22.5% 10.9% 11.9% Impairment loss 1,491 584 Selling, general and administrative expenses 9,548 11,147 10,378 9,637 11,356 (Loss) Income from operations (4,293) 18,385 20,330 5,815 8,164 Other income, net 1,860 1,429 2,928 764 1,427 (Loss) Income before income taxes (2,433) 19,814 23,258 6,579 9,591 Income tax (benefit) expense (142) (12,560) 6,314 1,737 2,541 Net (Loss) Income (2,291) 32,374 16,944 4,842 7,050 Net (loss) income attributable to noncontrolling interests (84) (60) (28) 5 32 Net (loss) income attributable to the stockholders of AGX $ (2,207) $ 32,434 $ 16,972 $ 4,837 $ 7,018 EPS attributable to the stockholders of Argan, Inc. Basic $ (0.14) $ 2.08 $ 1.09 $ 0.31 $ 0.45 Diluted $ (0.14) $ 2.07 $ 1.08 $ 0.31 $ 0.45 Weighted average number of shares outstanding Basic 15,573 15,569 15,568 15,568 15,559 Diluted 15,573 15,702 15,673 15,656 15,743 Cash dividends per share $ 0.25 $ 0.25 $ 0.25 $ 0.25 $ 17

Appendix Reconciliations to EBITDA Consolidated (in thousands except per share amounts) Three Months Ended 31-Jan-19 31-Oct-18 31-Jul-18 30-Apr-18 31-Jan-18 Net (loss) income $ (2,291) $ 32,374 $ 16,944 $ 4,842 $ 7,050 Less EBITDA attributable to noncontrolling interests 84 60 28 (5) (32) Interest expense 110 549 Income tax (benefit) expense (142) (12,560) 6,314 1,737 2,541 Depreciation 957 898 796 771 843 Amortization of purchased intangible assets 253 253 253 253 256 EBITDA attributable to the stockholders of Argan, Inc. $ (1,139) $ 21,025 $ 24,445 $ 8,147 $ 10,658 EBITDA per diluted share $ (0.07) $ 1.34 $ 1.56 $ 0.52 $ 0.68 Years Ended Janaury 31, 18 2019 2018 2017 Net income $ 51,869 $ 72,346 $ 77,426 Less EBITDA attributable to noncontrolling interests 167 (335) (7,098) Interest expense 659 Income tax (benefit) expense (4,651) 40,280 37,106 Depreciation 3,422 2,779 2,043 Amortization of purchased intangible assets 1,012 1,031 1,163 EBITDA attributable to the stockholders of Argan, Inc. $ 52,478 $ 116,101 $ 110,640 EBITDA per diluted share $ 3.34 $ 7.36 $ 7.08

Appendix Consolidated Balance Sheets - Assets (dollars in thousands) ASSETS January 31, 2019 January 31, 2018 CURRENT ASSETS Cash and cash equivalents $ 164,318 $ 122,107 Short-term investments 132,213 311,908 Accounts receivable, net 36,174 26,287 Contract assets 58,357 13,847 Other current assets 25,286 10,878 TOTAL CURRENT ASSETS 416,348 485,027 Property, plant and equipment, net 19,778 15,299 Goodwill 32,838 34,329 Other purchased intangible assets, net 6,137 7,149 Deferred taxes 1,257 439 Other assets 290 426 TOTAL ASSETS $ 476,648 $ 542,669 19

Appendix Consolidated Balance Sheets Liabilities and Equity (dollars in thousands) LIABILITIES AND EQUITY January 31, 2019 January 31, 2018 CURRENT LIABILITIES Accounts payable $ 44,427 $ 100,238 Accrued expenses 29,500 35,360 Contract liabilities 8,349 47,664 TOTAL CURRENT LIABILITIES 82,276 183,262 Deferred taxes 1,279 TOTAL LIABILITIES 82,276 184,541 20 STOCKHOLDERS EQUITY Common stock 2,337 2,336 Additional paid-in capital 144,961 143,215 Retained earnings 247,616 211,112 Accumulated other comprehensive (loss) income (346) 1,422 TOTAL STOCKHOLDERS EQUITY 394,568 358,085 Non-controlling interests (196) 43 TOTAL EQUITY 394,372 358,128 TOTAL LIABILITIES AND EQUITY $ 476,648 $ 542,669