Argan, Inc. (NYSE: AGX) (“Argan” or the “Company”) today announced financial results for its third quarter ended October 31, 2021. For additional information, please read the Company’s Quarterly Report on Form 10-Q, which the Company intends to file today with the U.S. Securities and Exchange Commission (the “SEC”). The Quarterly 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)

“During the quarter, we were delighted to announce our second major contract signing and project start this year,” Rainer Bosselmann, Chairman and Chief Executive Officer of Argan, said. “In May, Gemma Power Systems started a contract to build one of the largest solar power plants in Pennsylvania. In October, Atlantic Projects Company started a contract to construct a 2 x 330 MW natural gas-fired power plant in Carrickfergus, Belfast, Northern Ireland. These awards reflect our efforts to expand our business development activities to target our core gas-fired power plant business as well as the complementary renewable power sector business. We are disappointed that certain other awarded projects have taken longer to start than initially anticipated. However, we are pleased with the current execution on all of our major projects despite the well-publicized global supply chain disruptions and current inflationary challenges. As a result, we are happy to announce earnings of $12.4 million, or $0.78 in earnings per share for the quarter ended October 31, 2021, which is our fifth consecutive quarter of earnings per share equal to or in excess of $0.60.”

Consolidated revenues for the quarter ended October 31, 2021 were $124.5 million, which represented a decrease of $2.9 million, or 2.3%, from consolidated revenues of $127.3 million reported for the three months ended October 31, 2020. The primary drivers of revenues for the three months ended October 31, 2021 related to the construction of the Guernsey Power Station, which has passed peak construction levels, the performance of construction activities on the new Maple Hill solar energy project and new Atlantic Projects Company projects, and increased revenues of $7.3 million in aggregate at our other business segments.

Consolidated gross profit for the three-month period ended October 31, 2021 was $26.1 million, which represented a gross profit percentage of 21.0% of corresponding consolidated revenues. The gross profit for the period reflected the profit contributions of the construction activities related to the major projects of the power industry services segment, the recovery of the industrial services segment from its low level of activity last year during the early months of the COVID-19 pandemic and the revenues recorded for the current quarter related to the settlement of a legal matter.

Selling, general and administrative expenses for the three months ended October 31, 2021 and 2020 were $11.6 million and $9.4 million, respectively, primarily reflecting increased costs for the current quarter associated with business development activities, incentive compensation and other personnel costs.

Due primarily to the consolidated pre-tax book income reported for the three-month period ended October 31, 2021 in the amount of $15.7 million, we reported income tax expense in the amount of $3.3 million, which represents an effective income tax rate of 20.9% for the period. For the three-month period ended October 31, 2020, we recorded income tax expense in the amount of $1.7 million which represented an effective income tax rate of approximately 15.0% for the three-month period.

For the three months ended October 31, 2021, our improved overall operating performance resulted in net income attributable to our stockholders in the amount of $12.4 million, or $0.78 per diluted share, compared to $9.5 million, or $0.60 per diluted share, in the prior year quarter.

For the nine months ended October 31, 2021, our improved overall operating performance resulted in net income attributable to our stockholders in the amount of $36.0 million, or $2.25 per diluted share, compared to $14.3 million, or $0.91 per diluted share, in the prior year period, a 153% increase.

As of October 31, 2021, cash, cash equivalents and short-term investments totaled $482 million and net liquidity was $301 million; furthermore, the Company had no debt. The Company’s consolidated amount of RUPO was approximately $0.5 billion as of October 31, 2021.

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.

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.

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