Argan reports Q3 EPS 40c vs. 56c last year

Reports Q3 revenue $163.8M vs. $117.9M last year. David Watson, CEO, commented, “During the third quarter, we delivered substantial revenue growth of 39% to $164 million, demonstrating the underlying strength of our major businesses. However, as we have previously mentioned, our international subsidiary, Atlantic Projects Company, has been impacted by operational and contractual challenges related to its Kilroot Power Station project in Northern Ireland (the “Kilroot” project), including supply chain delays, material changes to the project, the COVID-19 omicron outbreak, the war in Ukraine and extreme weather. Certain of these challenges have escalated, and as a result, in the third quarter we recorded a pre-tax loss of approximately $10.7 million associated with the Kilroot project. Naturally, we are disappointed by these developments and are focused on navigating the completion of this project by early next year and making every effort to mitigate these losses to improve the final results of the project. Excluding the Kilroot project, Argan achieved strong consolidated gross margin, as execution was solid across all of our businesses in the third quarter. Our businesses continue to successfully develop new opportunities in their end markets, maintaining our backlog of over $0.7 billion, which we expect to increase during the fourth quarter and next year. Our capabilities and proven track record as a full-service construction and project management partner for various types of power facilities are capturing interests and strengthening our pipeline. Importantly, our facility design and construction capabilities are energy diverse, positioning Argan as an ideal partner for the growing demand for reliable power grids and enhanced emergency power resources. We are excited about the prospects we’re seeing to help the energy industry as it transitions to meet increased demand through the establishment of both low emission and renewable power sources. With the growth in our business and strength of our balance sheet, we are pleased to enhance our commitment of returning value to our stockholders through a 20% increased quarterly dividend coupled with our currently active $125 million share repurchase program.”