8-K

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): April 13, 2022

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)

Registrant’s 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))

Indicate by check mark whether the Registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company   ☐

If an emerging growth company, indicate by check mark if the Registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Title of Each Class:	Trading Symbol(s):	Name of Each Exchange on Which Registered:
Common Stock, $0.15 Par Value	AGX	New York Stock Exchange

Item 2.02. Results of Operations and Financial Condition.

On April 13, 2022, Argan, Inc. (“Argan”) issued a press release announcing its financial results for the fiscal year and fourth quarter ended January 31, 2022. A copy of Argan’s press release is attached to this report as Exhibit 99.1 and is incorporated herein by reference.

Item 8.01. Other Events.

On April 11, 2022, Argan announced that its board of directors (the “Board”) declared a regular quarterly cash dividend in the amount of $0.25 per share of common stock, payable April 29, 2022 to stockholders of record at the close of business on April 21, 2022. A copy of Argan’s press release is attached to this report as Exhibit 99.2 and is incorporated herein by reference.

On April 13, 2022, Argan, Inc. announced that its Board approved an increase in the Company’s existing share repurchase program, from $50 million to $75 million, to acquire shares of the Company's Common Stock. The Company has repurchased shares at a cost of approximately $37 million under the authorization to-date.

Item 9.01. Financial Statements and Exhibits.

(d)Exhibits

Exhibit No.	Description
99.1	Press Release issued by Argan on April 13, 2022
99.2	Press Release issued by Argan on April 11, 2022
104	Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101)

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: April 13, 2022	By:	/s/ David H. Watson
		David H. Watson
		Senior Vice President, Chief Financial Officer, Treasurer and Secretary

EX-99.1

Exhibit 99.1

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

and Announces Increase to Share Repurchase Program

April 13, 2022 – ROCKVILLE, MD – Argan, Inc. (NYSE: AGX) (“Argan” or the “Company”) today announces financial results for its fiscal year and fourth quarter ended January 31, 2022. For additional information, please read the Company’s Annual Report on Form 10-K, which the Company intends to file today with the U.S. Securities and Exchange Commission (the “SEC”). The Annual Report can be retrieved from the SEC’s website at www.sec.gov or from the Company’s website at www.arganinc.com.

Summary Information (dollars in thousands, except per share data)

	January 31,
	2022			2021			Change
For the Fiscal Years Ended:
Revenues	$	509,370		$	392,206		$	117,164
Gross profit		99,732			62,067			37,665
Gross margin %		19.6	%		15.8	%		3.8	%
Net income	$	38,244		$	23,851		$	14,393
Diluted per share		2.40			1.51			0.89
EBITDA		53,837			29,544			24,293
Diluted per share		3.38			1.87			1.51
Cash dividends per share		1.00			3.00			(2.00)

	January 31,
As of:	2022		2021		Change
Cash, cash equivalents and short-term investments	$	440,498	$	456,726	$	(16,228)
Net liquidity (1)		284,257		270,133		14,124
RUPO (2)		397,023		552,531		(155,508)

(1)	Net liquidity, or working capital, is defined as total current assets less total current liabilities.
(2)	The amount of remaining unsatisfied performance obligations (“RUPO”) represents the project backlog related to active contracts with customers, as determined under revenue recognition rules.

“For the year, we were pleased to see increases in our business at all of our subsidiaries, resulting in an increase of 30% in our consolidated revenues year over year,” Rainer Bosselmann, Chairman and Chief Executive Officer of Argan, said. “We are working hard to continue winning new projects to replace certain of our major projects expected to be completed this year.  While it was difficult to see a few of our identified EPC project developments become unsuccessful, and for us to record certain impairments and writeoffs, we still believe there are a number of meaningful projects that will start this year for each of our subsidiaries.  Since year end, our business in Ireland already has received two limited notices to proceed with early activities related to the construction of new gas-fired power plant facilities near Dublin. Also, we continue to be pleased with the current execution on all of our major projects despite the well-publicized global supply chain disruptions and current inflationary challenges.

Delivering value to our customers and stockholders is our top priority. We are committed to a disciplined capital allocation strategy that balances returning capital to our stockholders and investing in our business and people. With this in mind, our Board of Directors approved an increase in the Company's existing share repurchase program, from $50 million to $75 million. We look forward to building on our Fiscal 2022 successes with a strong Fiscal 2023.”  

Fiscal Year 2022 Results

Consolidated revenues for the year ended January 31, 2022 (“Fiscal 2022”) were $509.4 million, which represented an increase of $117.2 million, or 29.9%, from consolidated revenues of $392.2 million reported for January 31, 2021 (“Fiscal 2021”). Revenues of the power industry services business increased by $78.7 million, or 24.7%, to $398.1 million for Fiscal 2022 compared to revenues of $319.4 million for Fiscal 2021. The revenues of this business represented 78.2% of consolidated revenues for Fiscal 2022 and 81.4% of consolidated revenues for the prior year. The primary drivers for the strong performance by the power industry services segment were increased revenues associated with the construction of the Guernsey Power Station and the Maple Hill Solar energy facility.

The revenues of industrial fabrication and field services increased by $32.6 million, or 50.0%, to $97.9 million for Fiscal 2022. Revenues for this segment for Fiscal 2022 and 2021 represented approximately 19.2% and 16.6% of corresponding consolidated revenues, respectively. The improvement in the current year business of this segment, which occurred primarily in field services, reflected increased project activity for several customers due to, in part, reduced COVID-19 challenges.

The amount of consolidated gross profit increased by 60.5% to $99.7 million for Fiscal 2022, or 19.6% of corresponding consolidated revenues, from the consolidated gross profit amount of $62.1 million reported for Fiscal 2021, which was 15.8% of corresponding consolidated revenues. The year-over-year improvement reflected the favorable impacts of the higher consolidated revenues and favorable gross profit contributions from all reportable business segments.

Selling, general and administrative expenses for Fiscal 2022 and Fiscal 2021 were $47.3 million, or 9.3% of corresponding consolidated revenues, and $39.0 million, or 10.0% of corresponding consolidated revenues, respectively. Additionally, as previously disclosed, due to the unsuccessful project development efforts by the Company’s consolidated VIE, we recorded an impairment loss related to capitalized project development costs in the amount of $7.9 million during the fourth quarter of Fiscal 2022, of which $2.5 million was attributed to the non-controlling interest.

Due primarily to the consolidated pre-tax book income reported for Fiscal 2022 in the amount of $47.1 million, we reported income tax expense in the amount of $11.4 million for the year. For Fiscal 2021, we reported consolidated pre-tax book income of $24.9 million and recorded income tax expense in the amount of $1.1 million, which amount is net of a $4.4 million net operating loss carryback benefit.

For Fiscal 2022, our improved overall operating performance resulted in net income attributable to our stockholders in the amount of $38.2 million, or $2.40 per diluted share. For Fiscal 2021, we reported net income attributable to our stockholders in the amount of $23.9 million, or $1.51 per diluted share.

As of January 31, 2022, cash, cash equivalents and short-term investments totaled $440 million and net liquidity was $284 million; furthermore, the Company had no debt. The Company’s consolidated amount of RUPO was approximately $0.4 billion as of January 31, 2022.

Fourth Quarter Results

Consolidated revenues for the quarter ended January 31, 2022 were $125.6 million, which represented an increase of $8.4 million, or 7.2%, from consolidated revenues of $117.2 million reported for the three months ended January 31, 2021. The primary drivers of revenues for the three months ended January 31, 2022 related to the construction of the Guernsey Power Station, the Maple Hill Solar energy facility and new Atlantic Projects Company projects. Gross profits increased slightly by $0.1 million to $22.2 million during the three months ended January 31, 2022 from $22.1 million for last year’s fourth quarter. However, our gross profit percentage for the current quarter declined to 17.7% of corresponding consolidated revenues, from 18.8% of corresponding revenues for last year’s fourth quarter, primarily due to a decrease in gross profits in our industrial fabrication and field services business.

Selling, general and administrative expenses for the three months ended January 31, 2022 and 2021 were $15.5 million and $10.2 million, respectively. The $5.3 million increase primarily reflected certain write offs and liability accruals associated with business development investments and other activities and with increased incentive compensation and other personnel costs. Additionally, we recorded the aforementioned impairment loss during the three months ended January 31, 2022.

As a result, our net income attributable to our stockholders for the three months ended January 31, 2022 declined to $2.2 million, or $0.14 per diluted share, compared to $9.6 million, or $0.60 per diluted share, for the prior year quarter.

Share Repurchase Program

Yesterday, the Company’s Board of Directors approved an increase in the existing program to repurchase shares of the Company's common stock from $50 million to $75 million. To date, the Company has repurchased 969,831 shares of common stock at a cost of approximately $37.5 million under the program.

The Board’s authorization permits the Company to make purchases of its common stock from time to time in the open market or through privately negotiated transactions, subject to market and other conditions, up to the aggregate authorized amount. The authorization of the Board of Directors allows the repurchase of shares through January 2024.

About Argan

Argan’s primary business is providing a full range of services to the power industry, including the renewable energy sector. Argan’s service offerings focus on the engineering, procurement and construction of natural gas-fired power plants and renewable energy facilities, along with related commissioning, operations management, maintenance, project development and consulting services, through its Gemma Power Systems and Atlantic Projects Company operations. Argan also owns The Roberts Company, which is a fully integrated fabrication, construction and industrial plant services company, and SMC Infrastructure Solutions, which provides telecommunications infrastructure services.

Certain matters discussed in this press release may constitute forward-looking statements within the meaning of the federal securities laws. Reference is hereby made to the cautionary statements made by the Company with respect to risk factors set forth in its most recent reports on Form 10-K, Forms 10-Q and other SEC filings. The Company’s future financial performance is subject to risks and uncertainties including, but not limited to, the successful addition of new contracts to project backlog, the receipt of corresponding notices to proceed with contract activities, the Company’s ability to successfully complete the projects that it obtains and the resurgence of the COVID-19 pandemic due to the spread of various

variants. The Company has several signed EPC contracts that have not started and may not start as forecasted due to market and other circumstances beyond its control. Actual results and the timing of certain events could differ materially from those projected in or contemplated by the forward-looking statements due to the risk factors highlighted above and described regularly in the Company’s SEC filings.

Company Contact:	Investor Relations Contact:
Rainer Bosselmann	David Watson
301.315.0027	301.315.0027

ARGAN, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS

(In thousands, except per share data)

	Three Months Ended				Years Ended
	January 31,				January 31,
	2022		2021		2022		2021
REVENUES	$	125,570	$	117,235	$	509,370	$	392,206
Cost of revenues		103,339		95,150		409,638		330,139
GROSS PROFIT		22,231		22,085		99,732		62,067
Selling, general and administrative expenses		15,508		10,214		47,321		39,041
Impairment losses		7,901		—		7,901		—
(LOSS) INCOME FROM OPERATIONS		(1,178)		11,871		44,510		23,026
Other income, net		983		145		2,552		1,859
(LOSS) INCOME BEFORE INCOME TAXES		(195)		12,016		47,062		24,885
Income tax expense		(128)		(2,465)		(11,356)		(1,074)
NET (LOSS) INCOME		(323)		9,551		35,706		23,811
Net loss attributable to non-controlling interests		(2,538)		—		(2,538)		(40)
NET INCOME ATTRIBUTABLE TO THE STOCKHOLDERS OF ARGAN, INC.		2,215		9,551		38,244		23,851
Foreign currency translation adjustments		(642)		685		(1,370)		35
COMPREHENSIVE INCOME ATTRIBUTABLE TO THE STOCKHOLDERS OF ARGAN, INC.	$	1,573	$	10,236	$	36,874	$	23,886
NET INCOME PER SHARE ATTRIBUTABLE TO THE STOCKHOLDERS OF ARGAN, INC.
Basic	$	0.14	$	0.61	$	2.43	$	1.52
Diluted	$	0.14	$	0.60	$	2.40	$	1.51
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING
Basic		15,590		15,697		15,715		15,668
Diluted		15,713		15,880		15,913		15,825
CASH DIVIDENDS PER SHARE	$	0.25	$	1.25	$	1.00	$	3.00

ARGAN, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except share and per share data)

	January 31,
	2022		2021
ASSETS
CURRENT ASSETS
Cash and cash equivalents	$	350,472	$	366,671
Short-term investments		90,026		90,055
Accounts receivable, net		26,978		28,713
Contract assets		4,904		26,635
Other current assets		34,904		34,146
TOTAL CURRENT ASSETS		507,284		546,220
Property, plant and equipment, net		10,460		20,361
Goodwill		28,033		27,943
Other purchased intangible assets, net		3,322		4,097
Deferred taxes, net		457		249
Right-of-use and other assets		4,029		3,760
TOTAL ASSETS	$	553,585	$	602,630
LIABILITIES AND EQUITY
CURRENT LIABILITIES
Accounts payable	$	41,822	$	53,295
Accrued expenses		53,315		50,750
Contract liabilities		127,890		172,042
TOTAL CURRENT LIABILITIES		223,027		276,087
Other noncurrent liabilities		4,963		4,135
TOTAL LIABILITIES		227,990		280,222
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS’ EQUITY
Preferred stock, par value $0.10 per share – 500,000 shares authorized; no shares issued and outstanding		—		—
Common stock, par value $0.15 per share – 30,000,000 shares authorized; 15,788,673 and 15,706,202 shares issued at January 31, 2022 and 2021, respectively; 15,257,688 and 15,702,969 shares outstanding at January 31, 2022 and 2021, respectively		2,368		2,356
Additional paid-in capital		158,190		153,315
Retained earnings		188,690		166,110
Less treasury stock, at cost – 530,985 and 3,233 shares at January 31, 2022 and 2021, respectively		(20,405)		(33)
Accumulated other comprehensive loss		(2,451)		(1,081)
TOTAL STOCKHOLDERS’ EQUITY		326,392		320,667
Non-controlling interests		(797)		1,741
TOTAL EQUITY		325,595		322,408
TOTAL LIABILITIES AND EQUITY	$	553,585	$	602,630

ARGAN, INC. AND SUBSIDIARIES

Reconciliation to EBITDA

(In thousands)(Unaudited)

	Three Months Ended
	January 31,
	2022		2021
Net (loss) income, as reported	$	(323)	$	9,551
Income tax expense		128		2,465
Depreciation		807		917
Amortization of purchased intangible assets		190		227
EBITDA		802		13,160
EBITDA of non-controlling interests		(2,538)		—
EBITDA attributable to the stockholders of Argan, Inc.	$	3,340	$	13,160

	Years Ended
	January 31,
	2022		2021
Net income, as reported	$	35,706	$	23,811
Income tax expense		11,356		1,074
Depreciation		3,367		3,715
Amortization of purchased intangible assets		870		904
EBITDA		51,299		29,504
EBITDA of non-controlling interests		(2,538)		(40)
EBITDA attributable to the stockholders of Argan, Inc.	$	53,837	$	29,544

EX-99.2

Exhibit 99.1

ARGAN, INC. DECLARES REGULAR QUARTERLY DIVIDEND

OF $0.25 PER SHARE

April 11, 2022 – ROCKVILLE, MD – Argan, Inc. (NYSE: AGX) (“Argan” or the “Company”) announces that on April 8, 2022, its Board of Directors declared a regular quarterly cash dividend in the amount of $0.25 per share of common stock, payable April 29, 2022 to stockholders of record at the close of business on April 21, 2022.

About Argan, Inc.

Argan’s primary business is providing a full range of services to the power industry, including the renewable energy sector. Argan’s service offerings focus on the engineering, procurement and construction of natural gas-fired power plants and renewable energy facilities, along with related commissioning, operations management, maintenance, project development and consulting services, through its Gemma Power Systems and Atlantic Projects Company operations. Argan also owns The Roberts Company, which is a fully integrated fabrication, construction and industrial plant services company, and SMC Infrastructure Solutions, which provides telecommunications infrastructure services.

Company Contact:	Investor Relations Contact:
Rainer Bosselmann	David Watson
301.315.0027	301.315.0027

XML

Document and Entity Information	Apr. 13, 2022
Document and Entity Information [Abstract]
Document Type	8-K
Document Period End Date	Apr. 13, 2022
Entity File Number	001-31756
Entity Registrant Name	ARGAN, INC.
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	13-1947195
Entity Address, Address Line One	One Church Street
Entity Address, Adress Line Two	Suite 201
Entity Address, City or Town	Rockville
Entity Address, State or Province	MD
Entity Address, Postal Zip Code	20850
City Area Code	301
Local Phone Number	315-0027
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Title of 12(b) Security	Common Stock, $0.15 Par Value
Trading Symbol	AGX
Security Exchange Name	NYSE
Entity Emerging Growth Company	false
Entity Central Index Key	0000100591
Amendment Flag	false