UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of report (Date of earliest event reported): December 13, 2012
ARGAN, INC.
(Exact Name of Registrant as Specified in its Charter)
Delaware | 001-31756 | 13-1947195 | ||
(State or Other Jurisdiction of Incorporation) |
(Commission File Number) |
(IRS Employer Identification No.) | ||
One Church Street, Suite 201, Rockville, MD | 20850 | |||
(Address of Principal Executive Offices) | (Zip Code) |
Registrants telephone number, including area code: (301) 315-0027
Not Applicable
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the Registrant under any of the following provisions:
¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 2.02. | Results of Operations and Financial Condition. |
On December 13, 2012, Argan, Inc. (Argan) issued a press release announcing its financial results for the three months ended October 31, 2012. A copy of Argans press release is attached to this report as Exhibit 99.1 and incorporated herein by reference.
Item 9.01. | Financial Statements and Exhibits. |
(d) | Exhibits. |
Exhibit |
Description | |
99.1 | Argan, Inc., Press Release, issued December 13, 2012. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
ARGAN, INC. | ||||
Date: December 14, 2012 | By: | /s/ Arthur F. Trudel | ||
Arthur F. Trudel | ||||
Senior Vice President and Chief Financial Officer |
EXHIBIT INDEX
Exhibit |
Description | |
99.1 | Argan, Inc., Press Release, issued December 13, 2012. |
Exhibit 99.1
ARGAN, INC. REPORTS STRONG THIRD QUARTER RESULTS
December 13, 2012 ROCKVILLE, MD Argan, Inc. (NYSE MKT: AGX) today announced financial results for the three and nine months ended October 31, 2012.
For the quarter ended October 31, 2012, net revenues were $74.5 million compared to $43.6 million during the quarter ended October 31, 2011. Gemma Power Systems (Gemma) contributed $70.5 million or 95% of net revenues from continuing operations in the third quarter of fiscal 2013, compared to $41.3 million or 95% of net revenues from continuing operations in the third quarter of fiscal 2012. The substantial increase in comparative net revenues was due primarily to significant levels of construction activity at a large gas-fired power plant in Southern California and commencement of full construction activity at a biomass power project in Texas.
For the nine months ended October 31, 2012, net revenues were $220.8 million compared to $85.9 million during the nine months ended October 31, 2011. Gemma contributed $206.4 million or 93% of net revenues from continuing operations in the first nine months of fiscal 2013 compared to $79.7 million or 93% of net revenues from continuing operations in the first nine months of fiscal 2012.
The Company reported EBITDA (Earnings before interest, taxes, depreciation and amortization) from continuing operations of $9.6 million for the quarter ended October 31, 2012 compared to $4.0 million for the same prior year period. Gemma, for its segment, provided $10.5 million in EBITDA for the third quarter of fiscal 2013 compared to $4.7 million in the third quarter of fiscal 2012. The Company reported EBITDA from continuing operations of $26.6 million for the nine months ended October 31, 2012 compared to $7.8 million for the same prior year period. Gemma, for its segment, provided $27.9 million in EBITDA for the first nine months of fiscal 2013 compared to $10.1 million for the first nine months of fiscal 2012.
In the third quarter of fiscal 2013, the Company reported income from continuing operations before income taxes of $9.3 million compared to income from continuing operations before income taxes of $3.8 million in the third quarter of fiscal 2012.
For the first nine months of fiscal 2013, the Company reported income from continuing operations before income taxes of $26.0 million compared to income from continuing operations before income taxes of $7.2 million for the first nine months of fiscal 2012.
Net income attributable to the stockholders of Argan for the quarter ended October 31, 2012 was $6.1 million or $0.43 per diluted share based on 14,106,000 diluted shares outstanding, compared to $2.0 million or $0.15 per diluted share based on 13,744,000 diluted shares outstanding for the quarter ended October 31, 2011.
Net income attributable to the stockholders of Argan for the nine months ended October 31, 2012 was $16.7 million or $1.19 per diluted share based on 14,075,000 diluted shares outstanding compared to net income of $4.7 million or $0.34 per diluted share based on 13,715,000 diluted shares outstanding for the nine months ended October 31, 2011.
Argan had consolidated cash of $196.1 million as of October 31, 2012 and was debt free. Consolidated working capital was approximately $82.7 million as of October 31, 2012.
Contract backlog as of October 31, 2012 was $236 million compared to $415 million as of January 31, 2012.
Commenting on Argans results, Rainer Bosselmann, Chairman and Chief Executive Officer stated, Our Gemma team has been fueling the strong Argan performance during fiscal 2013. We appreciate their efforts.
About Argan, Inc.
Argans 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 facilities including biodiesel, ethanol, and renewable energy sources such as wind 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 Companys ability to achieve its business strategy while effectively managing costs and expenses; (2) the Companys 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 Argans 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 Companys most recent reports on Form 10-K and 10-Q, and other SEC filings.
Company Contact: | Investor Relations Contact: | |
Rainer Bosselmann | Arthur Trudel | |
301.315.0027 | 301.315.9467 |
ARGAN, INC. AND SUBSIDIARIES
Consolidated Statements of Operations
(Unaudited)
Three Months Ended October 31, | Nine Months Ended October 31, | |||||||||||||||
2012 | 2011 | 2012 | 2011 | |||||||||||||
Net revenues |
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Power industry services |
$ | 70,527,000 | $ | 41,269,000 | $ | 206,364,000 | $ | 79,678,000 | ||||||||
Telecommunications infrastructure services |
3,959,000 | 2,328,000 | 14,430,000 | 6,254,000 | ||||||||||||
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Net revenues |
74,486,000 | 43,597,000 | 220,794,000 | 85,932,000 | ||||||||||||
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Cost of revenues |
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Power industry services |
58,173,000 | 35,248,000 | 173,339,000 | 65,807,000 | ||||||||||||
Telecommunications infrastructure services |
3,177,000 | 1,882,000 | 11,339,000 | 5,113,000 | ||||||||||||
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Cost of revenues |
61,350,000 | 37,130,000 | 184,678,000 | 70,920,000 | ||||||||||||
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Gross profit |
13,136,000 | 6,467,000 | 36,116,000 | 15,012,000 | ||||||||||||
Selling, general and administrative expenses |
3,780,000 | 2,735,000 | 10,105,000 | 7,868,000 | ||||||||||||
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Income from operations |
9,356,000 | 3,732,000 | 26,011,000 | 7,144,000 | ||||||||||||
Other (expense) income, net |
(11,000 | ) | 33,000 | (29,000 | ) | 84,000 | ||||||||||
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Income from continuing operations before income taxes |
9,345,000 | 3,765,000 | 25,982,000 | 7,228,000 | ||||||||||||
Income tax expense |
3,632,000 | 1,460,000 | 9,741,000 | 2,658,000 | ||||||||||||
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Income from continuing operations |
5,713,000 | 2,305,000 | 16,241,000 | 4,570,000 | ||||||||||||
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Discontinued operations |
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Income (loss) on discontinued operations (including gains on disposal of $58,000 and $1,286,000 for the three and nine months ended October 31, 2011, respectively) |
| (365,000 | ) | (405,000 | ) | 444,000 | ||||||||||
Income tax benefit (expense) |
| 72,000 | 120,000 | (326,000 | ) | |||||||||||
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Income (loss) on discontinued operations |
| (293,000 | ) | (285,000 | ) | 118,000 | ||||||||||
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Net income |
5,713,000 | 2,012,000 | 15,956,000 | 4,688,000 | ||||||||||||
Add Loss attributable to noncontrolling interest |
352,000 | | 748,000 | | ||||||||||||
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Net income attributable to the stockholders of Argan |
$ | 6,065,000 | $ | 2,012,000 | $ | 16,704,000 | $ | 4,688,000 | ||||||||
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Earnings (loss) per share attributable to the stockholders of Argan: |
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Continuing operations |
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Basic |
$ | 0.44 | $ | 0.17 | $ | 1.24 | $ | 0.34 | ||||||||
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Diluted |
$ | 0.43 | $ | 0.17 | $ | 1.21 | $ | 0.33 | ||||||||
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Discontinued operations |
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Basic |
$ | | $ | (0.02 | ) | $ | (0.02 | ) | $ | 0.01 | ||||||
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Diluted |
$ | | $ | (0.02 | ) | $ | (0.02 | ) | $ | 0.01 | ||||||
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Net income |
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Basic |
$ | 0.44 | $ | 0.15 | $ | 1.22 | $ | 0.34 | ||||||||
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Diluted |
$ | 0.43 | $ | 0.15 | $ | 1.19 | $ | 0.34 | ||||||||
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Weighted average number of shares outstanding |
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Basic |
13,822,000 | 13,609,000 | 13,728,000 | 13,605,000 | ||||||||||||
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Diluted |
14,106,000 | 13,744,000 | 14,075,000 | 13,715,000 | ||||||||||||
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Cash dividend declared per common share |
$ | $0.60 | $ | 0.50 | $ | 0.60 | $ | 0.50 | ||||||||
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ARGAN, INC. AND SUBSIDIARIES
Reconciliations to EBITDA
Continuing Operations (Unaudited)
Three Months Ended October 31, | ||||||||
2012 | 2011 | |||||||
Income from continuing operations |
$ | 5,713,000 | $ | 2,305,000 | ||||
Interest expense |
17,000 | | ||||||
Income tax expense |
3,632,000 | 1,460,000 | ||||||
Amortization of purchased intangible assets |
61,000 | 87,000 | ||||||
Depreciation |
136,000 | 112,000 | ||||||
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EBITDA |
$ | 9,559,000 | $ | 3,964,000 | ||||
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Reconciliations to EBITDA
Power Industry Services (Unaudited)
Three Months Ended October 31, | ||||||||
2012 | 2011 | |||||||
Income before income taxes |
$ | 10,300,000 | $ | 4,533,000 | ||||
Interest expense |
17,000 | | ||||||
Amortization of purchased intangible assets |
61,000 | 87,000 | ||||||
Depreciation |
77,000 | 53,000 | ||||||
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EBITDA |
$ | 10,455,000 | $ | 4,673,000 | ||||
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Reconciliations to EBITDA
Continuing Operations (Unaudited)
Nine Months Ended October 31, | ||||||||
2012 | 2011 | |||||||
Income from continuing operations |
$ | 16,241,000 | $ | 4,570,000 | ||||
Interest expense |
44,000 | | ||||||
Income tax expense |
9,741,000 | 2,658,000 | ||||||
Amortization of purchased intangible assets |
182,000 | 262,000 | ||||||
Depreciation |
385,000 | 344,000 | ||||||
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EBITDA |
$ | 26,593,000 | $ | 7,834,000 | ||||
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Reconciliations to EBITDA
Power Industry Services (Unaudited)
Nine Months Ended October 31, | ||||||||
2012 | 2011 | |||||||
Income before income taxes |
$ | 27,461,000 | $ | 9,678,000 | ||||
Interest expense |
44,000 | | ||||||
Amortization of purchased intangible assets |
182,000 | 262,000 | ||||||
Depreciation |
205,000 | 153,000 | ||||||
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EBITDA |
$ | 27,892,000 | $ | 10,093,000 | ||||
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Management uses EBITDA, a non-GAAP financial measure, for planning purposes, including the preparation of operating budgets and the determination of appropriate levels of operating and capital investments. Management believes that EBITDA provides additional insight for analysts and investors in evaluating the Companys financial and operational performance and in assisting investors in comparing the Companys financial performance to those of other companies in the Companys 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 the Companys GAAP results of operations. Pursuant to the requirements of SEC Regulation G, a reconciliation between the Companys 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 Companys SEC filings.
ARGAN, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
October 31, 2012 |
January 31, 2012 |
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(Unaudited) | (Note 1) | |||||||
ASSETS |
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CURRENT ASSETS: |
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Cash and cash equivalents |
$ | 196,056,000 | $ | 156,524,000 | ||||
Accounts receivable, net |
25,761,000 | 16,053,000 | ||||||
Costs and estimated earnings in excess of billings |
1,000,000 | 2,781,000 | ||||||
Deferred income tax assets |
991,000 | 691,000 | ||||||
Prepaid expenses and other current assets |
1,916,000 | 4,528,000 | ||||||
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TOTAL CURRENT ASSETS |
225,724,000 | 180,577,000 | ||||||
Property and equipment, net ($4,728,000 and $1,469,000 related to variable interest entities as of October 31 and January 31, 2012, respectively) |
8,270,000 | 2,761,000 | ||||||
Goodwill |
18,476,000 | 18,476,000 | ||||||
Intangible assets, net |
2,392,000 | 2,574,000 | ||||||
Deferred income tax and other assets |
123,000 | 864,000 | ||||||
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TOTAL ASSETS |
$ | 254,985,000 | $ | 205,252,000 | ||||
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LIABILITIES AND EQUITY |
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CURRENT LIABILITIES: |
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Accounts payable |
$ | 43,790,000 | $ | 29,524,000 | ||||
Accrued expenses |
8,315,000 | 6,751,000 | ||||||
Dividends payable |
8,359,000 | | ||||||
Billings in excess of costs and estimated earnings |
82,558,000 | 68,004,000 | ||||||
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TOTAL CURRENT LIABILITIES |
143,022,000 | 104,279,000 | ||||||
Other liabilities |
10,000 | 10,000 | ||||||
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TOTAL LIABILITIES |
143,032,000 | 104,289,000 | ||||||
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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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Common stock, par value $0.15 per share 30,000,000 shares authorized; 13,940,598 and 13,661,098 shares issued at October 31 and January 31, 2012, respectively; 13,937,365 and 13,657,865 shares outstanding at October 31 and January 31, 2012, respectively |
2,091,000 | 2,049,000 | ||||||
Warrants outstanding |
15,000 | 590,000 | ||||||
Additional paid-in capital |
93,640,000 | 89,714,000 | ||||||
Retained earnings |
17,289,000 | 8,944,000 | ||||||
Treasury stock, at cost 3,233 shares at October 31 and January 31, 2012 |
(33,000 | ) | (33,000 | ) | ||||
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TOTAL STOCKHOLDERS EQUITY |
113,002,000 | 101,264,000 | ||||||
Noncontrolling interest (variable interest entities) |
(1,049,000 | ) | (301,000 | ) | ||||
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TOTAL EQUITY |
111,953,000 | 100,963,000 | ||||||
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TOTAL LIABILITIES AND EQUITY |
$ | 254,985,000 | $ | 205,252,000 | ||||
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Note 1 The condensed consolidated balance sheet as of January 31, 2012 has been derived from audited financial statements.