Q2 2025 Argan Inc Earnings Call

September 5, 2024

Speaker Change: Good evening ladies and gentlemen and welcome to the Argining, earnings release conference call for the second fiscal quarter ended July 31, 2024.

Operator: was released conference call for the second fiscal quarter ended July 31, 2024. This call is being recorded. All participants have been placed on a listen-only mode.

Speaker Change: This call is being recorded. All participants have been placed on a listen only mode, following management's remarks, the call will be open for questions. There is a slide presentation that accompanies today's remarks which can be accessed to be in the webcast.

Operator: Following management's remarks, the call will be open for questions. There is a slide presentation that accompanies today's remarks, which can be accessed via the webcast.

Jennifer Belodeau: At this time, it is my pleasure to turn the floor over to your host for today, Jennifer Belodeau, of IMS Investor Relations. Please go ahead, ma'am.

Speaker Change: At this time, it is my pleasure to turn the floor over to your host for today, Jennifer Belodeau, of IMS and best of relations. Please go ahead, man.

Jennifer Belodeau: Thank you. Good evening and welcome to our conference call to discuss Argan's results for the second fiscal quarter ended July 31, 2024. On the call today, we have David Watson, Chief Executive Officer, and Hank Diley, Chief Financial Officer.

Speaker Change: Thank you. Good evening and welcome to our conference call to discuss our GANS results for the second fiscal quarter and July 31, 2024. On the call today, we have David Watson, Chief Executive Officer and Hank Diley, Chief Financial Officer.

Jennifer Belodeau: I will take a moment to read the safe harbor statements. Statements made during this conference call and presented in the presentation that are not based on historical facts are forward-looking statements. Such statements include that are not limited to projections or statements of future goals and targets regarding the company's revenues and profits. These statements are subject to known and unknown factors and risks. Companies' actual results, performance, or achievements made different materially from those expressed or implied by these forward-looking statements, and some of the factors and risks that could cause or contribute to such material differences have been described in this afternoon's press release and in Argan's filing to the U.S.

Speaker Change: I'll take a moment to read the say of harvest statements. Statements may during this conference call and presented in the presentation that are not based on historical facts or forward-looking statements. Such statements include, they are not limited to, projections or statements as future goals and targets regarding the company's revenues and profits.

Speaker Change: The statements are subject to known and unknown factors and risks.

Speaker Change: Company's actual results, performance or achievements made differently from those expressed or implied by these forward-looking statements, and some of the factors in risk that could cause or contribute to such material differences have been described in this afternoon to press release and in Oregon's violence with the U.S. Securities and Exchange Commission.

Jennifer Belodeau: Securities and Exchange Commission. These statements are based on information and understandings that are believed to be accurate as of today, and we do not undertake any duty to update such forward-looking statements.

Speaker Change: The statements are based on information and understandings that are believed to be accurate as of today. And we do not undertake any duty to update such forward-looking statements.

Jennifer Belodeau: Earlier this afternoon, the company issued a press release announcing its second quarter fiscal 2025 financial results and filed its corresponding Form 10-K reports with the Securities and Exchange Commission.

Speaker Change: Earlier this afternoon, the company issued a press release announcing its second quarter fiscal 2025 financial results and filed its corresponding form 10 key reports, the Securities and Exchange Commission. Okay, I'll now turn the call over to David Watson CEO of our again. Go ahead, David.

David Watson: Okay, I'll now turn the call over to David Watson, CEO of Argan. Go ahead, David. Thanks, Jennifer, and thank you everyone for joining today. I'll start by reviewing some of the highlights of our operations and activities. Hank Diley, our CFO, will go over our financial results for the second fiscal quarter on July 31st, 2024, and then we'll open up the call for a brief Q&A.

David Watson: and thanks to everyone for joining today. I'll start by reviewing some of the highlights of our operations and activities. The Hank Dileau, our CFO, will go over our financial results for the second fiscal quarter in July 31st, 2024. And then we'll open up the call for a brief Q&A.

David Watson: But before we jump into the call, as many of you already know, today will be Hank's last time taking us through the financials, as he is set to retire in just a few weeks. Hank has had a distinguished 40-year career as a senior finance executive and has been with Argan for the past 17 years. So I think we can all agree that his retirement is well earned. So, on behalf of all of us here at Argan, I'd like to thank Hank for his many contributions and his counsel over the years. And we're appreciative that he will continue to help in a reduced role to ensure a successful transition.

Speaker Change: But before we jump into the call, as many of you already know, today will be Hank's last time taking us through the financials. I see it's set to retire in just a few weeks.

Speaker Change: Hank has had a distinguished 40-year career as a senior finance executive, and has been with Argynd for the past 17 years, so I think we can all agree that his retirement is well-earned.

Speaker Change: So, on behalf of all of us here at Argin, I'd like to thank Hank for his many contributions and his counsel over the years, and we're appreciative that he will continue to help and reduce role to ensure a successful transition.

David Watson: Josh Bakker, who has worked directly with Hank and myself for the last few years as BP and Corporate Controller, will take over the CFO role. Josh has nearly 20 years experience in strategic financial positions, and he joined Argan a few years ago from Charles River Associates, a NASDAQ-traded international consulting firm. It has been a valuable member of our finance team, and we're pleased to have him take this leadership role. So now on to the operational review of our Woodrow continue momentum in the second quarter, achieving consolidated revenues growth of 61% to 227 million, significantly enhanced profitability with net income of 18 million or $1.31 per diluted share in EBITDA of 25 million.

Speaker Change: Josh Focker, who has worked directly with Hank in myself for the last few years as VP and corporate controller, will take over the CFO role. Josh has nearly 20 years experience its strategic financial positions.

Speaker Change: and he joined our in a few years ago from Charles River Associates, a NASDAQ traded international consulting firm.

Speaker Change: has been a valuable number of our finance team and we're pleased to have them take this leadership role.

Speaker Change: So now on to the operational review of our fiscal 2025 Second Quarter.

Speaker Change: We drove continuum momentum in the second quarter achieving consolidated revenues growth of 61% to 227 million, significantly enhanced profitability with net income of 18 million.

Speaker Change: or $1.31 per diluted share in EBITDA of $25 million. Both are quarterly revenues and EBITDA performances for the strongest we've seen since 2017.

David Watson: Both are quarterly revenues and even-up performances where the strongest we've seen since 2017. Notably, we achieved a revenue growth in all of our business segments this quarter, highlighted by a 65% increase in revenues from power services and a 52% increase in revenues from industrial services. Project backlog at the close of the second quarter was over 1 billion and included approximately 570 million renewable projects. Additionally, our balance sheet reflected 485 million of cash and investments, net liquidity of 260 million, and no debt at July 31st, 2024.

Speaker Change: Notably, we achieved a revenue growth in all of our business segments this quarter, highlighted by 65% increase in revenues from power services and 52% increase in revenues from industrial services.

Speaker Change: Project backlog at the close of the second quarter was over 1 billion and included approximately 507 million in renewable projects.

Speaker Change: Additionally, our balance sheet reflected 485 million of cash in them investments, net liquidity of 260 million and no debt at July 31st 2024.

David Watson: Now onto the operational review. Slides 4 and 5 present our three reportable business segments. Our industry services comprise over Gemma Power Systems and Atlantic Projects Company operating units, which focus on the construction of multiple types of power facilities, including efficient gas-fired power plants, solar energy fields, biomass facilities, and wind farms. Power industry services revenues increase 65% to 173.8 million for the current quarter, as compared to 105.3 million for the second quarter of fiscal 2024. The segment represented 77% of our second quarter revenues and reported pre-tax book income of 21 million. Industrial construction services, which is represented by TRC, had another significantly strong quarter with a revenues contribution of 49.6 million or 22% of our second quarter consolidated revenues and pre-tax book income of 4 million.

Speaker Change: Now on to the Operational Review.

Speaker Change: Slides 4 and 5 present are three reportable business segments.

Speaker Change: Our industry services is comprised of our Gemma Power Systems and Atlantic Projects Company operating units.

Speaker Change: which focus on the construction of multiple types of power facilities, including efficient gas-fire power plants, solar energy fields, biomass facilities and wind farms.

Speaker Change: Power Industry Services revenues increased 65% to 173.8 million for the current quarter as compared to 105.3 million for the second quarter of fiscal 2024.

Speaker Change: The segment represented 77% of our second quarter revenues and reported pre-tax book income of 21 million.

Speaker Change: Industrial construction services, which is represented by TRC, and another significantly strong quarter.

Speaker Change: with a revenues contribution of $49.6 million or 22% of our second quarter consolidated revenues.

David Watson: These numbers represent revenues growth of 52% and a pre-tax book income increase of 38% compared to the second quarter of fiscal 2024. TRC can primarily provide solutions for industrial construction projects with a concentration in agriculture, petrochemical, open paper, water and power, and a scene a great deal of market interest for their capabilities as a project partner as many companies onshore or expand their U.S. Manufacturing operations. TRC has a strong footprint in the Southeast region of the U.S., which is a notably high-growth region for its focus industries. Finally, we have our telecommunications infrastructure services group, our smallest segment, which contributed 2% of our second quarter revenues.

Speaker Change: and pre-tax book income of 4 million. These numbers represent revenues growth of 52% in a pre-tax book income increase of 38% compared to the second quarter of fiscal 2024.

Speaker Change: TRC primarily provides solutions for industrial construction projects with a concentration in agriculture, petrochemical.

Speaker Change: Hope and paper, water and power, and a scene a great deal of market interest for their capabilities as a project partner as many companies onshore or expand their U.S. manufacturing operations.

Speaker Change: TRC has a strong footprint in the Southeast region of the US, which is a not only high-growth region or its focus industries.

Speaker Change: Finally, we have our telecommunications and infrastructure services group, our smallest segment, which contributed 2% of our second quarter revenues.

David Watson: SMC Infrastructure Solutions is our operating brand in this segment, providing outside construction services for the utility and telecommunications sectors, as well as inside the premises wiring services primarily for federal government locations and military installations requiring high-level security clearance. As we have noted during the past several quarters, energy demand is expected to grow significantly over the coming years. The heightened demand stems from the growing number of data centers coming online, as well as greater manufacturing activity related to the onshoring of semiconductor and battery and solar panel production, among other factors. All of these enterprises require reliable and high-quality power 24-7 in order to preserve operational security and efficiency.

Speaker Change: SMC Infrastructure Solutions is our operating brand in this segment.

Speaker Change: providing outside construction services for the utility, until communication sectors.

Speaker Change: as well as inside the premises wiring services primarily for federal government locations and military installations requiring high-level security clearance.

Speaker Change: As we've noted, during the past several quarters, energy demand is expected to grow significantly over the coming years.

Speaker Change: The heightened demand stems from the growing number of data centers coming online, as well as greater manufacturing activity related to the odd-shoring of semiconductor and battery and solar panel production among other factors.

Speaker Change: All of these enterprises require reliable and high-quality power 24-7 in order to preserve operational security and efficiency.

David Watson: Additionally, as more drivers shift to electric vehicles, it's anticipated that more homes and public venues will install the EV chargers necessary to keep those cars on the road. With these considerations in mind, it's widely acknowledged that energy infrastructure worldwide needs to be expanded and strengthened to meet anticipated increased capacity demands. Argan is energy agnostic, and while we are committed to assisting the transition to renewable power resources, we, along with the majority of the power industry, recognize that new traditional energy facilities are needed to support stable grids and reliable power generation. With our proven track record and capabilities related to the construction and management of complex power facility projects for both traditional natural gas and renewable energy resources, we are ideally suited to support the build-out of the consistent and dependable power resources that will be necessary moving forward.

Speaker Change: Additionally, as more drivers shift to electric vehicles, it's anticipated that more homes and public venues will install the EV Chargers necessary.

Speaker Change: to keep those cars on the road. With these considerations in mind, it's widely acknowledged that energy infrastructure worldwide needs to be expanded and strengthened to meet anticipated increased capacity demands.

Argan: Argan is energy agnostic, while we are committed to assisting the transition to renewable power resources.

Argan: We, along with the majority of the power industry, recognize that new traditional energy facilities are needed to support stable grids in reliable power generation.

Argan: With our proven track record and capabilities related to the construction, the management of complex power facility projects for both traditional natural gas and renewable energy resources.

Argan: We are ideally suited to support the build-out of the consistent and dependable power resources that will be necessary moving forward.

David Watson: We're energized by the pipeline of opportunities we're seeing and look forward to working with both new and existing partners who recognize our expertise and diverse capabilities as a valued collaborator on the anticipated impending build-out of power resources needed to meet the forecasts of unprecedented demand. In addition to ensuring stable power grids, we strongly support the shift to cleaner and more level power source resources. Renewable projects represented approximately 570 million of our 1 billion backlog at July 31, 2020, with 91 percent of our current project backlog now comprised of projects that support zero or low carbon emissions.

Argan: We're energized by the pipeline of opportunities we're seeing.

Argan: and look forward to working with both new and existing partners.

Argan: Recognize our expertise.

Argan: and diverse capabilities as a valued collaborator.

Argan: On the anticipated M-pending buildout of power resources needed to meet the forecast of unprecedented demand.

Argan: In addition to ensuring stable power grids, we strongly support the shift to cleaner and more level power source resources.

Argan: We're newable projects represented approximately 570 million of our 1 billion backlog at July 31, 24, with 91% of our current project backlog now comprise a project that supports zero or low carbon emissions.

David Watson: While we're pleased to have diversified our backlog with robust representation for renewable projects, we expect gas-fired and other thermal power plants to remain the core of our business for many years to come, especially as the industry seeks to provide consistent and high-quality power sources.

Argan: While we're pleased to have diversified our backlog with robust representation for renewable projects, we expect guests fired in other thermal power plants to remain the core of our business for many years to come, especially as the industry seeks to provide consistent and high quality power sources.

David Watson: Now I'd like to provide some project updates. Gemma is at peak construction on the Trumble Energy Center project in Lourdes Town, Ohio, where we're providing EPC services for a 950 megawatt natural gas-fired power plant. Trumble is a combined cycle power station that will assist in fulfilling electricity needs as the region phases out several coal-fired plants. From start to finish, the project will entail design, procurement, construction, and commissioning. Trumble is designed to be one of the cleanest and most efficient combined cycle gas turbine projects in the PJN market, and we expect to complete it early in calendar year 2026.

Speaker Change: Now I'd like to provide some project updates. Jima is at peak construction on the Trumble Energy Center Project in Lordstown, Ohio, where we're providing EPC services for a 950 megawatt natural gas-spired power plant.

Speaker Change: Trumbull is a combined cycle power station that will assist in fulfilling electricity needs as a region phases out several coal-fire plants. From start to finish, the project will entail design, procurement, construction and commissioning.

Speaker Change: Trumbo is designed to be one of the cleanest and most efficient combined cycle gas turbine projects in the PJ and market. And we expect to complete it early in counter year 2026.

David Watson: As we've detailed on previous calls, we have three solar and battery projects underway in Illinois, all of which have received full notices to proceed with EPC activities. Just to recap, the three facilities will provide 116 megawatts of solar power plus 22 megawatt hours of battery storage capability. These projects are exciting opportunities for us to demonstrate our capabilities and the renewable energy space. We also recently received full notice to proceed on a utility-scaled solar field in Illinois that will provide 405 megawatt of electrical power and will use pre-existing transmission and utility infrastructure from a nearby retired coal power plant.

Speaker Change: As we've detailed on previous calls, we have three solar and battery projects underway in Illinois, all which have received full notices to proceed with EPC activities.

Speaker Change: Just as recap, the three facilities will provide 116 megawatts of solar power, plus 22 megawatt hours of battery storage capability. These projects are exciting opportunities for us to demonstrate our capabilities in the renewable energy space.

Speaker Change: We also recently received a phone notice to proceed on a utility-scaled solar field as Illinois that will provide 405 megawatt of electrical power and will use pre-existing transmission and utility infrastructure from a nearby retired coal power plant.

David Watson: This major project represents the largest solar project to date for us and the continued expansion of our renewable business. This is an exciting time for us and the face of unprecedented energy demands. With our experience and reputation as a full-service construction partner of choice for both traditional and renewable power projects, Argan is extremely well-positioned to address the growing number of opportunities in our business pipeline.

Speaker Change: This major project represents the largest solar project to date for us and the continued expansion of our renewable business.

Speaker Change: This is an exciting time for us and the face of unprecedented energy demands.

Speaker Change: with our experience and reputation as a full service construction partner of choice for both traditional and renewable power projects. Our gain is extremely well positioned to address the growing number of opportunities in our business pipeline.

Hank Diley: With that, I'll turn the call over to Hank Diley to take us through the second quarter financials. Go ahead, Hank. Thanks, David, and good afternoon, everyone. On slide 11, we present our consolidated statements of earnings for the second quarter of fiscal 2025. Second quarter revenues increase 61 percent to $127 million. Reflecting an increase in revenues from all of our operating segments has compared to the second quarter of fiscal 2024. In the second quarter, our power industry services segment achieved a 65 percent increase in revenues, primarily related to increased quarterly construction activities for the Midwest, solar and battery projects, the Trumble Energy Center, the 405 megawatt Midwest Solar Project, and the Louisiana LNG facility.

Speaker Change: With that, I'll turn the call over to Hank Deily to take us through the second quarter financials. Still a head hank.

Hank Deily: Thanks, David, and good afternoon, everyone. On slide 11, we present our consolidated statements of earnings for the second quarter of fiscal 2025.

Hank Deily: 2nd quarter revenues increased 61% to $127 million.

Hank Deily: Reflecting an increase in revenues from all of our operating segments as compared to a second quarter of fiscal 2024.

Hank Deily: In the second quarter, our power industry services segment achieved a 65% increase in revenues.

Hank Deily: Primarily related to increased quarterly construction activities for the Midwest, solar and battery projects.

Hank Deily: the Trumble Energy Center.

Hank Deily: The 405 megawatts Midwest Solar Project

Hank Diley: In our industrial construction services segment, TRC achieved revenue growth to 52 percent, driven by increased field services activity. For the three-month period ended July 31, 2024, Argan reported consolidated gross profit of approximately $31.1 million, which represented a gross profit percentage of approximately 13.7 percent and reflected positive contributions from all three reportable business segments. Consolidated gross profit with a comparative quarter ended July 31, 2023, was $23.7 million. Representing a gross profit percentage of 16.8 percent, the decline in the gross profit during the current period was primarily due to a change in the mix of projects and contract types.

Hank Deily: and the Louisiana LNG facility.

Hank Deily: In our Industrial Construction Services segment, TRC achieved revenue growth of 52%. Driven by increased field services activity.

Speaker Change: For the three months period ended July 31, 2024, Argyne reported consolidated gross profit of approximately $31.1 million.

Speaker Change: which represented a gross profit percentage of approximately 13.7% and reflected positive contributions from all three reportable business segments.

Speaker Change: Consolidated Gross Profit for the Comparative Corps ended July 31, 2023, was $23.7 million. Representing a Gross Profit percentage of 16.8%.

Speaker Change: The decline in the gross profit during the current period was primarily due to a change in the mix of projects and contract types.

Hank Diley: Selling, general and administrative expenses of $12.4 million for the second quarter of fiscal 2025 increased as compared to SG&A of $10.5 million for the comparable prior year period. But these expenses decreased as a percentage of revenues to 5.5 percent in the second quarter of fiscal 2025, as compared to 7.4 percent in the second quarter of fiscal 2024. Ned income for the second quarter of fiscal 2025 was $18.2 million or $1.31 per diluted share compared to $12.8 million or 94 cents per diluted share for last year's comparable quarter. Ibiza, or earnings before interest, taxes, depreciation, and amortization for the quarter ended July 31, 2024, was $24.8 million compared to $17.9 million reported for the same period of last year.

Speaker Change: Selling General and Administrative Expenses, $12.4 million for the second quarter of fiscal 2025, increased as compared to SGNA of $10.5 million for the comparable prior year period.

Speaker Change: But these expenses decreased as a percentage of revenues, the 5.5% in the second quarter of fiscal 2025 as compared to 7.4% in the second quarter of fiscal 2024.

Speaker Change: Nadiancome for the second quarter of fiscal 2025 was 18.2 million dollars.

Speaker Change: or $1.31 per Duluda chair.

Speaker Change: Compared to $12.8 million, or 94 cents, heard Deilyou did share for the last year's Parable Corner.

Speaker Change: Ibida, or earnings before interest taxes, depreciation and amortization.

Speaker Change: For the quarter-ended July 31, 2024, was $24.8 million compared to $17.9 million, reported for the same period of last year.

Hank Diley: Ned income for the first six months of fiscal 2025 was $26.1 million dollars or $1.90 per diluted share compared to $14.9 million or $1.10 per diluted share for the first six months of last fiscal year. And Ibiza was $36.7 million for the six months ended July 31, 2024, compared with Ibiza of $21.6 million dollars for the first six months of fiscal 2024.

Speaker Change: Net income for the first six months of fiscal 2025 was $26.1 million, or $1.90 per diluted share.

Speaker Change: Compared to $14.9 million, or $1.10 per diluted share for the first six months of last fiscal year.

Speaker Change: and EBITDA was $36.7 million for the six months ended July 31, 2024.

Speaker Change: compared with EBITDA of $21.6 million for the first six months of fiscal 2024.

Hank Diley: With that, I'll turn the call back to David. Thanks, Hank.

Speaker Change: With that, I'll turn the call back to David.

David Watson: Turning to slide 12, our consolidated project backlog exceeded $1 billion at July 31, 2024, and represented an increase of approximately 25% from the balance of project backlog at the close of the first quarter of fiscal 2025. Our backlog includes a healthy group of longer term, fully committed projects in both the power industry services and industrial service segments and, as mentioned earlier, approximately $570 million of the backlog is comprised of renewable projects. On slide 13, we show a certain major projects currently included in our project backlog. Earlier in the call, I mentioned our activity at the Trumble Energy Center in Ohio.

David Watson: Thanks, Jake.

David Watson: Turn to the slide 12, our consolidated project backlog exceeded 1 billion at July 31, 2024, and represented an increase of approximately 25% from the balance of project backlog at the close of the first quarter of fiscal 2025.

Speaker Change: Our backlog includes a healthy group of longer term, fully committed projects in both the power industry services and industrial service segments and, as mentioned earlier, approximately 570 million of the backlog is comprised of renewable projects.

Speaker Change: On slide 13, we show a certain major projects currently included in our project backlog. Earlier in the call, I mentioned our activity at the Trumble Energy Center in Ohio.

David Watson: I also detailed the progress of three solar plus battery projects in Illinois, which have full notices to proceed and our full notice to proceed on a utility scale solar field in Illinois that will provide 405 megawatts of electrical power. During the quarter, as previously announced, we also entered into a full notice to proceed on a subcontract to install 590 megawatt gas turbines to provide dedicated power to an LNG facility in Louisiana. This project led by Gemma will be a collaboration with TRC and APC and demonstrates our ability to bring comprehensive solutions to market quickly. Also included in our project backlog are two separate water treatment plant projects being performed by TRC.

Speaker Change: I also detailed the progress of three solar plus battery projects in Illinois, which have full notices to proceed and are full notice to proceed on a utility scale solar field in Illinois that will provide 405 megawatts of electrical power.

Speaker Change: During the quarter, as previously announced, we also entered into a full notice proceed on a subcontract to install 590 Megawatt Gas Turbines, to provide dedicated power to an LNG facility in Louisiana.

Speaker Change: This project led by Gemma will be a collaboration with TRC and APC and demonstrates our ability to bring comprehensive solutions to market quickly.

Speaker Change: Also included in our project backlog, our two separate water treatments projects need performed by TRC. Over in Ireland, the three ESB FlexGen Picker power plants in the Shannon Bridge thermal plants are both in the final stages of those projects.

David Watson: Over in Ireland, the three ESB flexion-peaker power plants in the Shannonbridge Thermal Plants are both in the final stages of those projects. As I mentioned, the growing urgency of power grid operators in this country to ensure that we have the infrastructure in place to meet the forecasted growth in energy demand is hastening the number of new projects coming to market. Our backlog represents a diverse group of projects that reflect our wide-ranging operational capabilities and highlight the market recognition of our leadership role as an effective and reliable industry part.

Speaker Change: As I mentioned, the growing urgency of power grid operators in this country, to ensure that we have the infrastructure in place to meet the forecast to growth in energy demand.

Speaker Change: is facing the number of new projects coming to market. Our backlog represents a diverse group of projects that reflect our wide-ranging operational capabilities. And highlight the market recognition of our leadership role as an effective and reliable industry partner.

David Watson: Governor.

Hank Diley: Our balance sheet remained strong. At July 31, 2024, we had approximately 485 million cash, cash equivalents, and investments generating meaningful investment yields. Our net liquidity was 260 million, and we had no debt. Stockholders' equity was 308 million at July 31, 2024. This liquidity bridge demonstrates that our business model ordinarily requires a low-level capital expenditures. Our net liquidity of 259.8 million at July 31, 2024, has increased 14.9 million compared with net liquidity at January 31, 2024. Since November 2021, we have returned a total of approximately 101.6 million to shareholders. As we repurchased approximately 2.7 million shares of our common stock, or approximately 17% of shares outstanding at the beginning of the program, at an average price of $37.67 per share.

Speaker Change: Our bound sheet remained strong at July 31, 2024, we had approximately 485 million in cash, cash equivalents, and investments generating meaningful investment yields.

Speaker Change: are not the Quidig, was $250 million and we had no debt.

Speaker Change: So, I quote our equity with 308 million at July 31st, 2024.

Speaker Change: This liquidity bridge demonstrates that our business model ordinarily requires a low-level capital expenditures.

Speaker Change: Our net liquidity of 259.8 million at July 31, 2024 has increased 14.9 million compared with net liquidity at January 31, 2024.

Speaker Change: Since November 2021, we have returned a total of approximately 101.6 million to shareholders.

Speaker Change: As we've repurchased approximately 2.7 million shares of our comms dock, or approximately 17% of shares outstanding at the beginning of the program, at an average price of $37.67 per share.

Hank Diley: Additionally, in September 2023, we increased the company's quarterly dividend 20% from 25 cents to 30 cents per share, reflecting the strength of our business and increasing our annual run rate to $1.20 per share. Our company is dedicated to driving long-term value creation for shareholders. While our operating results can vary from quarter to quarter related to the timing of contracts, we remain focused on delivering long-term value to shareholders. Since 2008, we have increased our tangible book value and cumulative dividends per share considerably. We are excited about what the future holds for our again, and we are committed to growing our leadership role as a trusted construction partner for all types of energy facilities.

Speaker Change: Additionally, in September 2023, we increase the company's quarterly dividend 20% from 25 cents to 30 cents per share, reflecting the strength of our business and increasing our annual run rate to $1.20 per share.

Speaker Change: Our company is dedicated to a driving long-term diet creation for shareholders. While our operating results can vary from quarter to quarter, related to the timing of contracts, we remain focused on delivering long-term diet to shareholders.

Speaker Change: Since 2008, we have increased our tangible book value and cumulative dividends per share considerably.

Speaker Change: We are excited about what the future holds for our game, and we are committed to growing our leadership role as a trusted construction partner for all types of energy facilities.

Hank Diley: We have a long history of proven success with both traditional gas fired, as well as renewable projects, providing us a competitive advantage as existing and potential customers look to identify the best partner to help them build reliable energy resources in the face of unprecedented demand. For a data point, the Wall Street Journal recently reported that as of May, there were 133 natural gas-fired power plants under development in the United States according to S&P Global Commodity Insights. As recent forecasts project an 18% increase in natural gas-fired power generation between now and 2035. We believe we have a good reason to be optimistic about the continued demand for our services.

Speaker Change: We have a long history of proven success with both traditional gas fired.

Speaker Change: as well as renewable projects, providing us a competitive advantage as existing and potential customers look to identify the best partner to help them build reliable energy resources in the face of unprecedented demand.

Speaker Change: For a data point, the Wall Street Journal recently reported that as of May, there were 133 national gas-fired power plants under development in the United States, according to S&P Global Commodity Insights.

Speaker Change: As recent forecast project and 18% increase in natural gas fire power generation between now and 2035. We believe we have a good reason to be optimistic about the continued demand for our services.

Hank Diley: As we move through the balance of fiscal 2025, we are focused on winning the complex design and construction projects best suited to our capabilities that will add much needed liability and energy security to an already strained power grid.

Speaker Change: As we move through the balance of this goal 2025, we are focused on winning the complex design and construction projects best suited to our capabilities that will add much needed liability and energy security to an already strained power grid.

Hank Diley: To close, we remain focused on our long-term growth strategy. Leverage our core competencies to capitalize on existing and emerging market opportunities, maintain disciplined risk management with the goal of improving our project management effectiveness and minimizing costly project overruns. Strengthen our position as a partner of choice in the construction of low and net zero emission power generation facilities as the industry transitions to cleaner energy alternatives while maintaining grid reliability. and last but not least, drive organic growth while also being alert for acquisition opportunities that make sense for our business through thoughtful capital allocation. We're pleased with our progress to the first staff of 2025, which has built a strong foundation for our continued success.

Speaker Change: To close, we remain focused on our long-term growth strategy.

Speaker Change: leverage our core competencies to capitalize on existing and emerging market opportunities.

Speaker Change: Maintain discipline risk management with the goal of improving our project management effectiveness and minimizing costly project overruns.

Speaker Change: strengthen our position as a partner of choice in the construction of low and net zero emission power generation facilities as the industry transition to cleaner energy alternatives while maintaining grid reliability.

Speaker Change: and last but not least, drive organic growth while also being alert for acquisition opportunities to make sense for our business through thoughtful capital allocation.

Speaker Change: We're pleased with our progress to the first half of 2025, which has built a strong foundation for our continued success.

Hank Diley: We are focused on expanding our reach as a partner of choice to customers in traditional natural gas-fired and renewable power industries, as well as growing our customer base in the industrial segment of our business. I'd like to thank our employees for their dedication to executing each job on time and on budget, and to thank our shareholders for their continued support.

Speaker Change: We are focused on expanding our reach as a partner of choice to customers, traditional natural gas fired, and renewable power industries as well as growing our customer base in the industrial segment of our business.

Speaker Change: I'd like to thank our employees for their dedication to executing each job on time and on budget and to thank our shareholders for their continued support.

Operator: With that, operator, let's open it up for questions. Thank you. At this time, we will be conducting a question and answer session. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you'd like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment, please, while we pull for questions. Once again, please press star one if you have a question or a comment.

Speaker Change: With that, operator, let's open it up for questions.

Speaker Change: Thank you.

Speaker Change: At this time we'll be conducting a question and answer session. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you'd like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys.

Speaker Change: One moment please, will we pull for questions? Once again, please press star one if you have a question or a comment.

Christopher Moore: The first question comes from Chris Moore with CKS Securities. Please proceed. Hey, good afternoon, guys. Congratulations on a terrific quarter. Congratulations to Hank. Sounds exciting. Thank you. All right.

Speaker Change: The first question comes from Chris Moore with CKS Securities, please proceed.

Chris Moore: Hey, good afternoon guys. Gradulations on a terrific quarter. Congratulations to Hank. Sounds exciting. Thank you.

David Watson: Let me start. Certainly. You had referenced the 133 natural gas projects. We talked a little bit about that last quarter. It sounds like there are two primary challenges. One is turbine demand, is currently outstripping supply, and perhaps the bigger one is the interconnect agreements. Can you talk a little bit about those two and what you're seeing at this point? Yes, sure. The interconnection agreements continue to be a headwind, but what folks are really doing now is you're seeing a lot of developments that are moving ahead with what they call behind-the-meter power generating assets. And the number of the projects that we're targeting are just that behind-the-meter power generating assets that ultimately do want to be connected to the grid, but given the timeline on being able to do that, it can stretch out many years longer than folks want to get ready now.

Speaker Change: Alright, let's make it crummy start, certainly.

Chris Moore: Start with, you had referenced, you know, the 133 natural gas project we talked a little bit about that last quarter. It sounds like there are...

Speaker Change: Kind of two primary challenges, one is...

Speaker Change: Turbine Demand, you know, is currently outstripping supply and perhaps the bigger one is, you know, the inner connect agreements. Can you talk a little bit about those two and, you know, kind of what you're seeing at this point?

Speaker Change: Watson.

Watson: Yes, sure, the...

Watson: See.

Speaker Change: Interconnection agreements continue to be a headwind, but what folks are really doing now is you're seeing a lot of developments that are moving ahead with what they call behind the meter.

Speaker Change: Power Generating Assets.

Speaker Change: and the number of the projects that work targeting are just that behind the meter power generating assets that ultimately do want to be connected to the grid. But given the timeline on being able to do that, it can stretch out many years longer than folks want to get ready now. So that that is...

Operator: was released conference call for the second fiscal quarter ended July 31, 2024. This call is being recorded. All participants have been placed on a listen-only mode.

Operator: This call is being recorded.

Operator: All participants have been placed on a listen-only mode.

Operator: Following management's remarks, the call will be open for questions. There is a slide presentation that accompanies today's remarks which can be accessed via the webcast.

Operator: Following management's remarks, the call will be open for questions. There is a slide presentation that accompanies today's remarks, which can be accessed via the webcast.

David Watson: That is a known issue. It's a known issue, not just for natural gas, but also for renewables, and something that the grid operators are working feverishly trying to remedy with various efforts. But the show must go on, and folks are planning to build with or without interconnection agreements from here and there. As it relates to the turbine manufacturing limitations, that's correct. AI is a global phenomenon. Power use is up across the globe, not just in the U.S., and so the turbine manufacturers, notably GE, Siemens, and Mitsubishi, are flat out right now, and they are obviously trying to increase their capacity.

Speaker Change: That is a known issue. It's a known issue, not just for natural gas, but also for renewables. And something that the grid operators are working feverishly trying to remedy with various efforts.

Jennifer Belodeau: At this time, it is my pleasure to turn the floor over to your host for today, Jennifer Belodeau, of our conference call to discuss Argan's results for the second fiscal quarter ended July 31, 2024.

Jennifer Belodeau: At this time, it is my pleasure to turn the floor over to your host for today, Jennifer Belodeau, of IMS Investor Relations. Please go ahead, ma'am.

Jennifer Belodeau: On the call today, we have David Watson, Chief Executive Officer, and Hank Deily, Chief Financial Officer. I will take a moment to read the safe harbor statements. Statements made during this conference call and presented in the presentation that are not based on historical facts are forward-looking statements. Such statements include that are not limited to projections or statements of future goals and targets regarding the company's revenues and profits. These statements are subject to known and unknown factors and risks.

Jennifer Belodeau: Companies actually results performance or achievements made different materially from those expressed are implied by these forward-looking statements, and some of the factors and risks that could cause or contribute to such material differences have been described in this afternoon's press release and in Argan's filing to the U.S. Securities and Exchange Commission. These statements are based on information and understandings that are believed to be accurate as of today, and we do not undertake any duty to update such forward-looking statements.

Speaker Change: Manufacturing Limitations, that's correct. AI is a global phenomenon. Power.

Speaker Change: Power Use is up across the globe, not just in the U.S.

Speaker Change: and so the turbine manufacturer is notably GE, C-Men's, and Mitsubishi are flat out right now and they are obviously trying to increase their capacity but it is something where folks are having to.

David Watson: But it is something where folks are having to make commitments early in the process to, in a way, get a place in line to get a turbine. And those who do have a place in line to get a turbine, they are clearly can move their development forward quicker than others. So it's both of these items are headwinds, which is a few and far between, giving all the tailwinds in our space. Yes, absolutely.

Speaker Change: to make commitments early in the process to, in a way, get a place in line to get a turbine, and those who do have a place in line to get a turbine, they are clearly can move their development forward quicker than others, so it's...

Operator: Earlier this afternoon, the company issued a press release announcing its second quarter fiscal 2025 financial results and filed its corresponding form 10Q reports the Securities and Exchange Commission.

Speaker Change: It both of these items are headwinds, which is a few and far between given all the tailwinds in our space.

Jennifer Belodeau: Okay, I'll now turn the call over to David Watson, CEO of Argan. Go ahead, David.

David Watson: Okay, I'll now turn the call over to David Watson, CEO of Argan. Go ahead, David.

David Watson: Backlog, a billion, 570 million that were renewable, I think your record backlog was maybe 1.4 billion ten years ago or so. So maybe two questions there. Is there such thing as an optimal backlog level that you think about, and what would be that optimal mix between natural gas and renewables? Well, the optimal backlog amount, and I'll tell all of my teams and the guys and gals that are making all, you know, doing all the hard work to cover their years, is got to be in the multiple billions of dollars from my perspective. That being said, obviously there are operational capacity considerations, and while I believe we've expanded that and can work on ten plus jobs in a given time, both gas and renewable, it is something to always be mindful of.

Speaker Change: Absolutely.

David Watson: Thanks Jennifer, and thank you everyone for joining today. I'll start by reviewing some of the highlights of our operations and activities. Hank Deily, our CFO, will go over our financial results for the second fiscal quarter and it's July 31, 2024, and then we'll open up the call for a brief Q&A.

David Watson: Thanks, Jennifer, and thank you everyone for joining today. I'll start by reviewing some of the highlights of our operations and activities. Hank Diley, our CFO, will go over our financial results for the second fiscal quarter on July 31st, 2024, and then we'll open up the call for a brief Q&A.

Speaker Change: Backlock of Billion is 570 million that were newable. I think your record backlock was maybe 1.4 billion, 10 years ago or so. So maybe two questions there. Is there such thing as an optimal backlock level?

Speaker Change: You think about and what would be that optimal mix between natural gas and renewables?

David Watson: But before we jump into the call, as many of you already know, today will be Hank's last time taking us through the financials as he has set to retire in just a few weeks. Hank has had a distinguished 40-year career as a senior finance executive and has been with Argan for the past 17 years, so I think we can all agree that his retirement is well earned. So on behalf of all of us here at Argan, I'd like to thank Hank for his many contributions and his counsel over the years, and we're appreciative that he will continue to help and a reduced role to ensure a successful transition.

Speaker Change: Well, the optimal backlog amount, and I'll tell all of my teams and the guys and guys that are making all doing all the hard work to cover their years, is got to be in the multiple billions of dollars from my perspective.

Speaker Change: That being said, obviously there are operational capacity considerations and while I believe we've expanded that and that can...

Speaker Change: Work on.

Speaker Change: 10-plus jobs in a given time, both gas and renewable, it is something that always be mindful of. But as it relates to the mix of the backlog, to me, it really just depends on where we are in the market. I think historically we have been...

David Watson: But, as it relates to the mix of the backlog, to me, it really just depends on where we are in the market. I think historically we have been a builder of gas fire power plants, and that is our sweet spot. But clearly, we have grown our renewable business and hope to have that sustainably as a big piece of our business on a go-forward basis. So what does that mix look like? I don't really have one, Chris, except that typically would be north of 50% for gas and south of that for renewables. And don't forget about our industrial businesses as well, which is significant as well.

Speaker Change: at Builder of a Gas Fired Power Plant, and that is our sweet spot, but clearly we have grown our renewable business and hope to have that sustainably as a big piece of our business on a go-forward basis. So what does that mix look like?

David Watson: So now on to the operational review of our fiscal 2025 second quarter. We drove continued momentum in the second quarter, achieving consolidated revenues growth of 61% to 227 million, significantly enhanced profitability with net income of 18 million or $1.31 per diluted share in EBITDA of 25 million. Both are quarterly revenues and even-up performances were the strongest we've seen since 2017. Notably, we achieved a revenue growth in all of our business segments this quarter, highlighted by 65% increase in revenues from power services and a 52% increase in revenues from industrial services.

Speaker Change: I don't really have one Chris except that typically would be north of 50% for gas and south of that, for renewables and don't forget about our industrial business as well, which is significant as well.

David Watson: Got it, not so full.

David Watson: On the gas side, what's the likelihood of closing and beginning work on a relatively large natural gas project in 2025? I just trying to get a sense as I know you had talked about some at the end of Q4. Any further thoughts there on how those projects are progressing? Yeah, so we just got above a billion in backlog, and you're already asking for more, Chris. I was not sure if that's the exact answer. Understood, so yeah, we do continue to have visibility. We clearly are in a strong market and given our capabilities around natural gas builds.

Speaker Change: God, it's not so full. Just in turn on the gas side.

Speaker Change: What's the likelihood of closing in beginning work on a relatively large national natural gas project?

Speaker Change: Calendar 2025, is just trying to get a sense as I know you had talked about some at the end of Q4. Any further thoughts there on how those projects are progressing?

David Watson: Project backlog at the close of the second quarter was over 1 billion and included approximately 570 million renewable projects. Additionally, our balance sheet reflected 485 million of cash and investments net liquidity of 260 million and no debt at July 31st, 2024.

Speaker Change: Yeah, so we just got above a billion in backlog, and you're already asking for more Chris. That's your topic. I understand, so yeah, we do continue to have visibility. We clearly are in a strong market and given our capabilities around natural gas builds.

David Watson: Now on to the operational review. Slides 4 and 5 present our three reportable business segments. Our industry services comprise of our Gemma Power Systems and Atlantic Projects Company operating units, which focus on the construction of multiple types of power facilities including efficient gas-fired power plants, solar energy fields, biomass facilities and wind farms. Power industry services revenues increase 65% to 173.8 million for the current quarter as compared to 105.3 million for the second quarter of fiscal 2024.

David Watson: So given the support that we're seeing, say, an air-cott with the Texas Energy Fund, given the support that we're seeing actually in the PJM with the strong capacity price signal that was just sent out, which was about 270 per megawatt, which is a 900% increase from the last one. So there is a lot of positive data points out there that support natural gas buildouts, and I know we already talked about some of those headwinds earlier on this call. But for us, we do expect to have multiple gas power plants under contract. working on generating revenue over the next five to ten months.

Speaker Change: So given the support that we're seeing, say, an aircott with the Texas Energy Fund, given the support that we're seeing.

Speaker Change: Actually, in the PGM with the strong capacity price signal that was just sent out, which was about 270 per megawatt, which is 9% increase from the last one.

Speaker Change: So there is a lot of positive data points out there that support Natural Gas billed out. And I know we already talked about some of those headwinds early on this call, but for us we do expect to have multiple gas power plants under contract.

David Watson: The segment represented 77% of our second quarter revenues and reported pre-tax book income of 21 million. Industrial construction services, which is represented by TRC, had another significantly strong quarter with a revenues contribution of 49.6 million or 22% of our second quarter consolidated revenues and pre-tax book income of 4 million. These numbers represent revenues growth of 52% and a pre-tax book income increase of 38% compared to the second quarter of fiscal 2024.

Speaker Change: Working on generating revenue over the next five to ten months.

David Watson: Got it.

David Watson: Last one for me, anything worth mentioning on the kill route situation at this point in time? Well, I mean, it had very minimal PNL impact during Q2 since the operational phase has concluded. As you know, we have a $12.8 million loss on the project, which is significant and disappointing. But we consider all things and make our best efforts to get to, at the end of the day, not a whole lot to add there. We are going to continue to vigorously go after our claims, which are in excess of 25 million, and continue to pursue all the rights under the contract.

Speaker Change: God, last one for me, anything worth mentioning on the kill route situation at this point in time.

Speaker Change: Well, I mean, it's a very minimal PNL impact during Q2, since the operational phase has concluded.

David Watson: TRC can primarily provide solutions for industrial construction projects with a concentration in agriculture, petrochemical, open paper, water and power and a scenic, great deal of market interest for their capabilities as a project partner, as many companies onshore or expand their U.S, manufacturing operations. TRC has a strong footprint in the southeast region of the U.S., which is a notably high-growth region or its focus industries.

Speaker Change: As you know, we have a $12.8 million loss on the project, which is significant and disappointing, but we consider all things and make our best efforts to get.

Speaker Change: to attend a day not a whole lot to add there. We are going to continue to vigorously go after our claims which are an excess of 25 million and continue to pursue all the rights under the contract.

David Watson: Sounds good. I'll leave it there. Thanks, guys. Absolutely.

David Watson: Finally, we have our telecommunications infrastructure services group, our smallest segment, which contributed 2% of our second quarter revenues. SMC infrastructure solutions is our operating brand in this segment, providing outside construction services for the utility and telecommunications sectors as well as inside the premises wiring services, primarily for federal government locations and military installations requiring high-level security clearance.

Speaker Change: a

Speaker Change: Sounds good. I'll leave it there. Thanks, guys. Absolutely.

Robert Brown: Once again, if you have a question or a comment, please press star one. The next question comes from Rob Brown with Lake Street Capital. Please proceed. Good afternoon. Congratulations on the small progress. Thanks, Rob. Just sort of following up on the TRC business, it was very strong this quarter. Did you have sense of how that business is, the environment is there and what the opportunity pipeline is in that market? Absolutely. And it was a record quarter, and I guess I really didn't stress that enough in the prepared remarks. I mean, revenues of almost 50 million in Q2 and Rob, they've generated over 170 million of revenue and over 16 million of EBITO over the last 12 months.

Speaker Change: oh

Speaker Change: Once again, if you have a question or a comment, please press star 1. The next question comes from Rob Brown with Lake Street Capital. Please proceed.

Rob Brown: Good afternoon and congratulations on the program.

Trump: Thanks, Trump.

Speaker Change: Just sort of falling up on the TRC business. It was very strong this quarter. It gives a sense of sort of how that business is. The environment is there and what the opportunity pipeline is in that market.

David Watson: As we have noted, during the past several quarters, energy demand is expected to grow significantly over the coming years. The heightened demand stems from the growing number of data centers coming online as well as greater manufacturing activity related to the onshoreing of semiconductor and battery and solar panel production among other factors. All of these enterprises require reliable and high-quality power 24-7 in order to preserve operational security and efficiency. Additionally, as more drivers shift to electric vehicles, it's anticipated that more homes and public venues will install the EV chargers necessary to keep those cars on the road.

Speaker Change: Absolutely, and the...

Speaker Change: It was a record quarter, and I guess I really didn't stress that enough in the proprietary marks. I mean, revenues of almost 50 million in Q2 and Rob, they've generated over 170 million of revenue.

David Watson: So it's just been a tremendous growth and success story. And with that, there has been a conversion of backlog to revenue. So TRC, I believe, is positioned with the right leadership team to grow.

Speaker Change: in over 16 million of EBITDA over the last 12 months, so it's just been a tremendous growth and success story.

Rob Brown: and with that there has been a conversion of backlog to revenue.

David Watson: I do think that there might be a little bit of a slight dip over the next quarter or two in their backlog, given the amount of revenues that they're generating and given my visibility and our visibility in the timing of future project awards, which you know is always difficult for us to predict both for our industrial business as well as for our power business. Okay, guys, it sounds like a little hard to predict, but do you see sort of a strengthening pipeline there like you and the gas side? I do. It's perfectly positioned in the southeast.

Speaker Change: TRC, I believe, is positioned with the right leadership team.

Speaker Change: to grow. I do think that there might be a little bit of a slight dip.

Speaker Change: Over the next quarter or two in their backlog, given the amount of revenues that they're generating, and given my visibility and our visibility in.

David Watson: With these considerations in mind, it's widely acknowledged that energy infrastructure worldwide needs to be expanded and strengthened to meet anticipated increased capacity demands. Argan is energy agnostic and while we are committed to assisting the transition to renewable power resources, we, along with the majority of the power industry, recognize that new traditional energy facilities are needed to support stable grids and reliable power generation. With our proven track record and capabilities related to the construction and management of complex power facility projects for both traditional natural gas and renewable energy resources, we are ideally suited to support the build out of the consistent and dependable power resources that will be necessary moving forward.

Speaker Change: The timing of future project awards, which you know, is always difficult for us to predict both our industrial business as well as for our power business.

Speaker Change: i

Speaker Change: Okay, guys, it's not like it's a little hard to predict, but do you see?

Speaker Change: sort of a strengthening pipeline there like you on the gas, the side.

Speaker Change: I do, I do, it's perfectly positioned in the southeast, and I guess I was kind of talking a little bit to the very short term nature of things, but for my long term standpoint, TRC should...

David Watson: And I guess I was kind of talking a little bit to the very short-term nature of things, but for my long-term standpoint, TRC should continue to generate this growth and their revenues. And we're really excited about that.

Speaker Change: continued to generate this growth and their revenues and we're really excited about that.

David Watson: Okay, great.

David Watson: And then on the solar battery projects that you have going now, could you remind us again on the timeline of those? How long do those sort of burn off revenue and how long do those take to complete roughly? Yeah, so there's three solar battery projects, and not all projects are on the same phase of construction, but we are a couple of projects that are targeted to be completed by the end of this fiscal year. And then one of them is a little bit after that. So the timing of those projects is, again, most of the solar jobs are pretty quick burns, and these are no exceptions.

Speaker Change: Okay, great. And then on the solar battery projects that you have going now, I'll get your medicine again on the timeline of those, how long those sort of burn off revenue, and how long those take to complete properly.

Speaker Change: Yeah, so there's three solar battery projects and not all projects are on the same phase of construction, but

David Watson: In addition to ensuring stable power grids, we strongly support the shift to cleaner and more level power source resources. Renewable projects represented approximately 570 million of our 1 billion backlog at July 31, 2020, with 91 percent of our current project backlog, now comprised of projects that support zero or low carbon emissions. While we're pleased to have diversified our backlog with robust representation for renewable projects, we expect gas fired and other thermal power plants to remain the core of our business for many years to come, especially as the industry seeks to provide consistent and high-quality power sources.

Speaker Change: We are the couple of projects that are targeted to be completed by the end of this fiscal year, and then one of them is a little bit after that. So the timing of those projects is, again, most of the solar jobs are pretty quick burns and these are no exceptions.

David Watson: Okay, good.

David Watson: And then I guess we'll be back to your comments on the gas projects, with all the projects of the next sort of five to ten months. I think you said, are those, are those, you know, are those seeing some of these project relations that you talked about earlier, or are those, are those really just going through their own process at about the timeline expected? Wait, we're seeing them continue to check off all the milestones. We've known efforts in the developmental process and write those; our EPA air permits, those are getting gas to the site, its land acquisition, its, its raising capital and, and, and the merit of other things, including securing a turbine.

Speaker Change: Okay, good. And then I guess we'll be back to your comments on the gas projects with all the projects on the next sort of five to 10 months. I think you said.

Speaker Change: are those, you know, are those seeing some of these project relations that you talked about earlier or those really just going through their own process at about the time line you expected.

David Watson: Now I'd like to provide some project updates.

David Watson: Gemma is at peak construction on the Trumbull Energy Center project in Lourdes Town, Ohio, where we're providing EPC services for a 950 megawatt natural gas fired power plant. Trumbull is a combined cycle power station that will assist in fulfilling electricity needs as the region phases out several coal fired plants. From start to finish, the project will entail design, procurement, construction, and commissioning.

Speaker Change: We're seeing them continue to check off all the milestone efforts in the developmental process and write those are EPA air permits, those are getting gas.

Speaker Change: to the site, its land acquisition, its raising capital, and the merit of other things, including securing a turbine.

David Watson: So, we do feel really good about the number of projects that we've been tracking and been working with. The potential customers on to be able to make the statement that we expect multiple projects over the next five to ten months.

Speaker Change: So we do feel really good about the number of projects that we've been tracking and been working with potential customers on to be able to make the statement that we expect multiple projects over the next five to 10 months.

David Watson: Trumbull is designed to be one of the cleanest and most efficient combined cycle gas turbine projects in the PJN market, and we expect to complete it early in calendar year 2026. As we've detailed on previous calls, we have three solar and battery projects underway in Illinois, all of which have received full notices to proceed with EPC activities. Just a recap, the three facilities will provide 116 megawatts of solar power, plus 22 megawatt hours of battery storage capability. These projects are exciting opportunities for us to demonstrate our capabilities in the renewable energy space.

David Watson: Okay, great. Thank you.

Operator: I'll turn it over. Excellent.

Speaker Change: Okay, Rick, thank you, I'll turn it over.

Operator: Okay, we have no further questions in queue.

Operator: We've reached the end of the question and answer session.

Speaker Change: Excellent.

David Watson: I will now turn the call back over to David Watson for closing remarks. Well, thank you all for participating in today's call, and Hank, thank you for all that you have done for Argan. I have chairs working with you over the years.

Speaker Change: Okay, we've no further questions in queue. We've reached the end of the question and answer session. I will now turn the call back over to David Watson for closing remarks.

David Watson: Well, thank you all for participating in today's call and Hank, thank you for all that you have done for our GAN. I have chairs working with you over the years. So thank you.

Hank Diley: So thank you. Well, David, you're welcome. I thank Argan and the listeners out there are Argan. I thank them for giving me this opportunity to work for almost 17 years doing what I love to. This has been a great opportunity for me. One of the best things that ever happened to me in my professional career is having the opportunity to work with David. He's taught me or did teach me much, and it's been a great ride.

David Watson: We also recently received full notice to proceed on a utility-scaled solar field in Illinois that will provide 405 megawatt of electrical power and will use pre-existing transmission and utility infrastructure from a nearby retired coal power plant. This major project represents the largest solar project to date for us and the continued expansion of our renewable business.

Hank: Well, David, you're welcome.

Argin: I say the Argin and the listeners out there are Argin, I thank them.

David Watson: For giving me this opportunity to work for almost 17 years, doing what I'd love to do. This has been a great opportunity for me.

David Watson: This is an exciting time for us and the face of unprecedented energy demands with our experience and reputation as a full-service construction partner of choice for both traditional and renewable power projects, Argan is extremely well-positioned to address the growing number of opportunities in our business pipeline.

David Watson: One of the best things that ever happened to me in my professional career.

David Watson: is having the opportunity to work with David. He's taught me, we did teach me much and it's been a great ride. So thank you.

David Watson: So thank you for the opportunity, and good luck to Argan going forward. I'll be around. Okay, thank you.

David Watson: for the opportunity and good luck to Argyne and going forward and I'll be around.

Hank Deily: With that, I'll turn the call over to Hank Diley to take us through the second quarter financials. Go ahead, Hank.

Hank Diley: With that, I'll turn the call over to Hank Diley to take us through the second quarter financials. Go ahead, Hank.

Operator: With that, we look forward to speaking with you again when we report our third quarter fiscal 2025 results. Have a great evening, everybody. Thank you.

Speaker Change: Thank you, thank you.

Speaker Change: With that, we look forward to speaking with you again when we report our third quarter of fiscal 2025 results.

Hank Deily: Thanks, David, and good afternoon, everyone. On slide 11, we present our consolidated statements of earnings for the second quarter of fiscal 2025. Second quarter revenues increase 61% to $227 million, reflecting an increase in revenues from all of our operating segments as compared to the second quarter of fiscal 2024. In the second quarter, our power industry services segment achieved a 65% increase in revenues, primarily related to increased quarterly construction activities for the Midwest, solar, and battery projects, the Trumble Energy Center, the 405 megawatt Midwest solar project, and the Louisiana LNG facility.

Hank Diley: Thanks, David, and good afternoon, everyone. On slide 11, we present our consolidated statements of earnings for the second quarter of fiscal 2025. Second quarter revenues increase 61 percent to $127 million. Reflecting an increase in revenues from all of our operating segments has compared to the second quarter of fiscal 2024. In the second quarter, our power industry services segment achieved a 65 percent increase in revenues, primarily related to increased quarterly construction activities for the Midwest, solar and battery projects, the Trumble Energy Center, the 405 megawatt Midwest Solar Project, and the Louisiana LNG facility. In our industrial construction services segment, TRC achieved revenue growth to 52 percent, driven by increased field services activity.

Speaker Change: and have a great evening, everybody.

Operator: This concludes today's conference, and you may disconnect your lines at this time. Thank you for your participation.

Hank Deily: In our industrial construction services segment, TRC achieved revenue growth at 52%, driven by increased field services activity. For the three-month period ended July 31, 2024, Argan reported consolidated gross profit of approximately $31.1 million, which represented a gross profit percentage of approximately 13.7% and reflected positive contributions from all three reportable business segments. Consolidated gross profit for the comparative quarter ended July 31, 2023 was $23.7 million, representing a gross profit percentage of 16.8%.

Hank Diley: For the three-month period ended July 31, 2024, Argan reported consolidated gross profit of approximately $31.1 million, which represented a gross profit percentage of approximately 13.7 percent and reflected positive contributions from all three reportable business segments. Consolidated gross profit with a comparative quarter ended July 31, 2023, was $23.7 million.

Hank Diley: Representing a gross profit percentage of 16.8 percent, the decline in the gross profit during the current period was primarily due to a change in the mix of projects and contract types. Selling, general and administrative expenses of $12.4 million for the second quarter of fiscal 2025 increased as compared to SG&A of $10.5 million for the comparable prior year period. But these expenses decreased as a percentage of revenues to 5.5 percent in the second quarter of fiscal 2025, as compared to 7.4 percent in the second quarter of fiscal 2024. Ned income for the second quarter of fiscal 2025 was $18.2 million or $1.31 per diluted share compared to $12.8 million or 94 cents per diluted share for last year's comparable quarter.

Hank Deily: The decline in the gross profit during the current period was primarily due to a change in the mix of projects and contract types. Selling general and administrative expenses of $12.4 million for the second quarter of fiscal 2025 increased as compared to SGNA of $10.5 million for the comparable prior year period. But these expenses decreased as a percentage of revenues to 5.5% in the second quarter of fiscal 2025 as compared to 7.4% in the second quarter of fiscal 2024.

Hank Deily: Net income for the second quarter of fiscal 2025 was $18.2 million or $1.31 per diluted share compared to $12.8 million or $94 cents per diluted share for last year's comparable quarter. Ebita or earnings before interest taxes depreciation and amortization for the quarter ended July 31, 2024 was $24.8 million compared to $17.9 million reported for the same period of last year. Net income for the first six months of fiscal 2025 was $26.1 million dollars or $1.90 per diluted share compared to $14.9 million or $1.10 per diluted share for the first six months of last fiscal year. And Ebita was $36.7 million for the six months ended July 31, 2024 compared with Ebita of $21.6 million dollars for the first six months of fiscal 2024.

Hank Diley: Ibiza, or earnings before interest, taxes, depreciation, and amortization for the quarter-ended July 31, 2024, was $24.8 million compared to $17.9 million reported for the same period of last year. Ned income for the first six months of fiscal 2025 was $26.1 million dollars or $1.90 per diluted share compared to $14.9 million or $1.10 per diluted share for the first six months of last fiscal year. And Ibiza was $36.7 million for the six months ended July 31, 2024, compared with Ibiza of $21.6 million dollars for the first six months of fiscal 2024.

Hank Diley: With that, I'll turn the call back to David. Thanks, Hank.

Hank Deily: With that, I'll turn the call back to David. Thanks, Hank.

David Watson: Turning to slide 12, our consolidated project backlog exceeded $1 billion at July 31, 2024 and represented an increase of approximately 25% from the balance of project backlog at the close of the first quarter of fiscal 2025. Our backlog includes a healthy group of longer term, fully committed projects in both the power industry services and industrial service segments and, as mentioned earlier, approximately 570 million of the backlog is comprised of renewable projects.

David Watson: On slide 13, we show a certain major projects currently included in our project backlog. Earlier in the call, I mentioned our activity at the Trumble Energy Center in Ohio. I also detailed the progress of three solar plus battery projects in Illinois, which have full notices to proceed and our full notice to proceed on a utility scale solar field in Illinois that will provide 405 megawatts of electrical power. During the quarter, as previously announced, we also entered into a full notice to proceed on a subcontract to install 590 megawatt gas turbines to provide dedicated power to an LNG facility in Louisiana.

David Watson: On slide 13, we show certain major projects currently included in our project backlog. Earlier in the call, I mentioned our activity at the Trumble Energy Center in Ohio. I also detailed the progress of three solar plus battery projects in Illinois, which have full notices to proceed and our full notice to proceed on a utility scale solar field in Illinois that will provide 405 megawatts of electrical power. During the quarter, as previously announced, we also entered into a full notice to proceed on a subcontract to install 590 megawatt gas turbines to provide dedicated power to an LNG facility in Louisiana.

David Watson: This project, led by Gemma, will be a collaboration with TRC and APC and demonstrates our ability to bring comprehensive solutions to market quickly. Also included in our project backlog are two separate water treatment plant projects being performed by TRC. Over in Ireland, the three ESB flexion-peaker power plants in the Shannonbridge thermal plants are both in the final stages of those projects. As I mentioned, the growing urgency of power grid operators in this country to ensure that we have the infrastructure in place to meet the forecasted growth in energy demand is hastening the number of new projects coming to market. Our backlog represents a diverse group of projects that reflect our wide-ranging operational capabilities and highlight the market recognition of our leadership role as an effective and reliable industry part.

David Watson: This project led by Gemma will be a collaboration with TRC and APC and demonstrates our ability to bring comprehensive solutions to market quickly. Also included in our project backlog are two separate water treatment plant projects being performed by TRC. Over in Ireland, the three ESB flexion-peaker power plants in the Shannonbridge Thermal Plants are both in the final stages of those projects. As I mentioned, the growing urgency of power grid operators in this country to ensure that we have the infrastructure in place to meet the forecasted growth in energy demand is hastening the number of new projects coming to market.

David Watson: Our backlog represents a diverse group of projects that reflect our wide-ranging operational capabilities and highlight the market recognition of our leadership role as an effective and reliable industry part.

Hank Deily: Governor. Our balance sheet remained strong. At July 31, 2024, we had approximately 485 million cash, cash equivalents, and investments generating meaningful investment yields. Our net liquidity was 260 million, and we had no debt. Stockholders' equity was 308 million, at July 31, 2024. This liquidity bridge demonstrates that our business model ordinarily requires a low-level capital expenditures. Our net liquidity of 259.8 million at July 31, 2024 has increased 14.9 million compared with net liquidity at January 31, 2024.

Hank Diley: Governor. Our balance sheet remained strong. At July 31, 2024, we had approximately 485 million cash, cash equivalents, and investments generating meaningful investment yields. Our net liquidity was 260 million, and we had no debt. Stockholders' equity was 308 million at July 31, 2024. This liquidity bridge demonstrates that our business model ordinarily requires a low-level capital expenditures. Our net liquidity of 259.8 million at July 31, 2024, has increased 14.9 million compared with net liquidity at January 31, 2024. Since November 2021, we have returned a total of approximately 101.6 million to shareholders. As we repurchased approximately 2.7 million shares of our common stock, or approximately 17% of shares outstanding at the beginning of the program, at an average price of $37.67 per share.

Hank Deily: Since November 2021, we have returned a total of approximately 101.6 million to shareholders. As we've repurchased approximately 2.7 million shares of our common stock, or approximately 17% of shares outstanding at the beginning of the program, at an average price of $37.67 per share. Additionally, in September 2023, we increased the company's quarterly dividend 20% from 25 cents to 30 cents per share, reflecting the strength of our business and increasing our annual run rate to $1.20 per share.

Hank Deily: Our company is dedicated to driving long-term value creation for shareholders, while our operating results can vary from quarter to quarter related to the timing of contracts, we remain focused on delivering long-term value to shareholders. Since 2008, we have increased our tangible book value and cumulative dividends per share considerably. We are excited about what the future holds for our again, and we are committed to growing our leadership role as a trusted construction partner for all types of energy facilities.

Hank Deily: We have a long history of proven success with both traditional gas fired, as well as renewable projects, providing us a competitive advantage as existing and potential customers look to identify the best partner to help them build reliable energy resources in the face of unprecedented demand. For a data point, the Wall Street Journal recently reported that as of May, there were 133 natural gas fired power plants under development in the United States according to S&P global commodity insights.

Hank Deily: As recent forecasts project an 18% increase in natural gas fired power generation between now and 2035. We believe we have a good reason to be optimistic about the continued demand for our services. As we move through the balance of fiscal 2025, we are focused on winning the complex design and construction projects best suited to our capabilities that will add much needed liability and energy security to an already strained power grid.

Hank Deily: To close, we remain focused on our long-term growth strategy. Leverage our core competencies to capitalize on existing and emerging market opportunities, maintain disciplined risk management with the goal of improving our project management effectiveness and minimizing costly project overruns. Strengthen our position as a partner of choice in the construction of low and net zero emission power generation facilities as the industry transition to cleaner energy alternatives while maintaining grid reliability, and last but not least drive organic growth while also being alert for acquisition opportunities that make sense for our business through thoughtful capital allocation.

Hank Deily: We're pleased with our progress to the first staff of 2025, which has built a strong foundation for our continued success. We are focused on expanding our reach as a partner of choice to customers in traditional natural gas fired and renewable power industries as well as growing our customer base in the industrial segment of our business.

Hank Diley: We're pleased with our progress to the first staff of 2025, which has built a strong foundation for our continued success. We are focused on expanding our reach as a partner of choice to customers in traditional natural gas-fired and renewable power industries, as well as growing our customer base in the industrial segment of our business.

Hank Deily: I'd like to thank our employees for their dedication to executing each job on time and on budget and to thank our shareholders for their continued support.

Hank Diley: I'd like to thank our employees for their dedication to executing each job on time and on budget, and to thank our shareholders for their continued support.

Operator: With that, operator, let's open it up for questions. Thank you. At this time, we'll be conducting a question and answer session.

Operator: If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you'd like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your hand set before pressing the star keys. One moment, please, while we pull for questions. Once again, please press star one if you have a question or a comment.

Chris Moore: The first question comes from Chris Moore with CKS Securities. Please proceed. Good afternoon, guys. Congratulations on a terrific quarter. Congratulations to Hank. Sounds exciting. Thank you. Yep. All right. Thank you, Chris.

Christopher Moore: The first question comes from Chris Moore with CKS Securities. Please proceed.

Christopher Moore: Hey, good afternoon, guys. Congratulations on a terrific quarter. Congratulations to Hank. Sounds exciting. Thank you. All right.

David Watson: Let me start. Certainly. You had referenced the 133 natural gas project. We talked a little bit about that last quarter. It sounds like there are kind of two primary challenges. One is turbine demand, you know, is currently outstripping supply. And perhaps the bigger one is, you know, the interconnect agreements. Can you talk a little bit about those two and kind of what you're seeing at this point? Yeah, sure. The interconnection agreements continue to be a headwind.

David Watson: But what folks are really doing now is you're seeing a lot of developments that are moving ahead with what they call behind the meter power generating assets. And the number of the projects that we're targeting are just that behind the meter power generating assets that ultimately do want to be connected to the grid. But given the timeline on being able to do that, it can stretch out many years, you know, longer than folks want to get ready now.

David Watson: So that is a known issue. It's a known issue not just for natural gas but also for renewables. And something that the grid operators are working feverishly trying to remedy with various efforts. But the show must go on and folks are planning to build with or without interconnection agreements from here and there. As it relates to the turbine manufacturing limitations, that's correct. AI is a global phenomenon. Power use is up across the globe, not just in the U.S. And so the turbine manufacturers notably G.E.

David Watson: Siemens and Mitsubishi are flat out right now. And they are obviously trying to increase their capacity, but it is something where folks are having to make commitments early in the process to in a way get a place in line to get a turbine. And those who do have a place in line to get a turbine, they are clearly can move their development forward quicker than others. So it's both of these items are headwinds, which is a few and far between given all the tailwinds in our space. Yes, absolutely.

David Watson: Backlog, a billion, 570 million that were renewable, I think your record backlog was maybe 1.4 billion 10 years ago or so. So maybe two questions there. Is there such thing as an optimal backlog level that you think about and what would be that optimal mix between natural gas and renewables? Well, the optimal backlog amount and I'll tell all of my teams and the guys and gals that are making all, you know, doing all the hard work to cover their years is got to be in the multiple billions of dollars from my perspective.

David Watson: That is the considerations and while I believe we've expanded that and can work on 10 plus jobs in a given time, both gas and renewable, it is something that will always be mindful of. But as it relates to the mix of the backlog, to me, it really just depends on where we are in the market. I think historically we have been a builder of a gas fire power plants and that is our sweet spot.

David Watson: But clearly we have grown our renewable business and hope to have that sustainably as a big piece of our business on a go forward basis. So what does that mix look like? I don't really have one Chris except that typically would be north of 50% for gas and south of that for renewables and don't forget about our industrial businesses as well which is significant as well. Got it, not so full.

David Watson: Got it, not so full.

David Watson: On the gas side, what's the likelihood of closing and beginning work on a relatively large natural gas project in 2025 is just trying to get a sense as I know you had talked about some at the end of Q4. Any further thoughts there on how those projects are progressing? Yeah, so we just got above a billion in backlog and you're already asking for more Chris. I was not sure if he understood.

David Watson: On the gas side, what's the likelihood of closing and beginning work on a relatively large natural gas project in 2025? I am just trying to get a sense, as I know you had talked about some at the end of Q4. Any further thoughts there on how those projects are progressing? Yeah, so we just got above a billion in backlog, and you're already asking for more, Chris. I was not sure if that's the exact answer. Understood, so yeah, we do continue to have visibility. We clearly are in a strong market and given our capabilities around natural gas builds.

David Watson: Yeah, we do continue to have visibility. We clearly are in a strong market and giving our capabilities around natural gas builds. Given the support that we're seeing say an aircott with the Texas Energy Fund given the support that we're seeing actually in the PJM with the strong capacity price signal that was just sent out which was about 270 per megawatt which is 900% increase from the last one. So there is a lot of positive data points out there that support natural gas buildouts and I know we already talked about some of those headwinds earlier on this call. But for us, we do expect to have multiple gas power plants under contract, working on generating revenue over the next five to ten months. Got it.

David Watson: Got it.

David Watson: Last one for me. Anything worth mentioning on the kill route situation at this point time? Well, I mean, it had very minimal PNL impact during Q2 since the operational phase has concluded. As you know, we have a $12.8 million loss on the project, which is significant and disappointing. But, you know, we consider all things and make our best efforts to get to, at the end of the day, not a whole lot to add there. We are going to continue to vigorously go after our claims, which are an excess of $25 million, and continue to pursue all the rights under the contract. Sounds good. I'll leave it there. Thanks, guys. Absolutely.

David Watson: Last one for me, anything worth mentioning on the kill route situation at this point time? Well, I mean, it had very minimal PNL impact during Q2 since the operational phase has concluded. As you know, we have a $12.8 million loss on the project, which is significant and disappointing. But we consider all things and make our best efforts to get to, at the end of the day, not a whole lot to add there. We are going to continue to vigorously go after our claims, which are in excess of 25 million, and continue to pursue all the rights under the contract.

David Watson: Sounds good. I'll leave it there. Thanks, guys. Absolutely.

Operator: Once again, if you have a question or a comment, please press star one.

Rob Brown: The next question comes from Rob Brown with Lake Street Capital. Please proceed. Good afternoon. Congratulations on the small progress. Thanks, Rob. Just sort of following up on the TRC business, it was very strong this quarter. Could you have sense of sort of how that business is? The environment is there and what the opportunity pipeline is in that market? Yeah, absolutely. And it was a record quarter. And I guess I really didn't stress that enough in the prepared remarks.

Robert Brown: The next question comes from Rob Brown with Lake Street Capital.

Robert Brown: Please proceed.

David Watson: Good afternoon. Congratulations on the small progress. Thanks, Rob. Just sort of following up on the TRC business, it was very strong this quarter. Did you have sense of how that business is, the environment is there and what the opportunity pipeline is in that market? Absolutely. And it was a record quarter, and I guess I really didn't stress that enough in the prepared remarks. I mean, revenues of almost 50 million in Q2 and Rob, they've generated over 170 million of revenue and over 16 million of EBITO over the last 12 months. So it's just been a tremendous growth and success story.

Rob Brown: I mean, revenues of almost 50 million in Q2 and Rob, they've generated over 170 million of revenue in over 16 million of EBITDA over the last 12 months. So it's just been a tremendous growth and success story. And with that, there has been a conversion of backlog to revenue. So TRC, I believe, is positioned with the right leadership team to grow. I do think that there might be a little bit of a slight dip over the next quarter or two in their backlog, given the amount of revenues that they're generating and given my visibility and our visibility in the timing of future project awards, which you know is always difficult for us to predict both for our industrial business as well as for our power business.

David Watson: And with that, there has been a conversion of backlog to revenue. So TRC, I believe, is positioned with the right leadership team to grow.

Rob Brown: Okay, guys, it sounds like it's a little hard to predict. But do you see sort of a strengthening pipeline there like you and the gas side? I do. It's perfectly positioned in the southeast. And I guess I was kind of talking a little bit to the very short-term nature of things. But for my long-term standpoint, TRC should continue to generate this growth and their revenues. And we're really excited about that. Okay, great.

Robert Brown: Okay, great.

Rob Brown: And then on the solar battery projects that you have going now, could you remind us again on the timeline of those? How long those sort of burn off revenue and and how long those take to complete roughly? Yeah, so there's three solar battery projects and not all projects are on the same phase of construction. But we are a couple of projects or targeted to be completed by the end of this fiscal year.

Rob Brown: And then one of them is a little bit after that. So the timing of those projects is, again, most of the solar jobs are pretty quick burns. And these are no exceptions. Okay, good. And then I guess we'll be back to your comments on the on the gas projects with all the projects of the next sort of five to 10 months. I think you said, are those, are those, you know, are those seeing some of these project delays that you talked about earlier, or are those, are those really just going through their own process that about the timeline expected?

David Watson: Okay, good. And then I guess we'll be back to your comments on the gas projects with all the projects of the next sort of five to ten months. I think you said, are those, are those, you know, are those seeing some of these project relations that you talked about earlier, or are those, are those really just going through their own process at about the timeline expected? Wait, we're seeing them continue to check off all the milestones. We've known efforts in the developmental process and write those; our EPA air permits, those are getting gas to the site, its land acquisition, its, its raising capital and, and, and the merit of other things, including securing a turbine.

Rob Brown: Great. We're seeing them continue to check off all the milestone efforts in the developmental process and write those are EPA air permits, those are getting gas to the site that's land acquisition. It's raising capital and the merit of other things, including securing a turbine. So we do feel really good about the number of projects that we've been tracking and been working with potential customers on to be able to make the statement that we expect multiple projects over the next five to 10 months. Okay, great. Thank you. I'll turn it over. Excellent. Okay, we have no further questions in queue. We've reached the end of the question and answer session.

Robert Brown: Okay, great.

Robert Brown: Thank you.

David Watson: I'll turn it over. Excellent.

Operator: Okay, we have no further questions in queue.

Operator: We've reached the end of the question and answer session.

David Watson: I will now turn the call back over to David Watson for closing remarks. Well, thank you all for participating in today's call and Hank. Thank you for all that you have done for Argan. I have chairs working with you over the years. So thank you. David, you're welcome. I thank Argan and the listeners out there are Argan. I thank them for giving me this opportunity to work for almost 17 years doing what I'd love to do.

David Watson: This has been a great opportunity for me. One of the best things that ever happened to me in my professional career is having the opportunity to work with David. He's taught me or did teach me much and it's been a great ride.

David Watson: So thank you for the opportunity, and good luck to Argan going forward. I'll be around. Okay, thank you.

Hank Deily: So thank you for the opportunity and good luck to Argan going forward and I'll be around. Okay, thank you.

Operator: With that, we look forward to speaking with you again when we report our third quarter fiscal 2025 results. Have a great evening, everybody. Thank you.

Operator: With that, we look forward to speaking with you again when we report our third quarter fiscal 2025 results and have a great evening, everybody. Thank you.

Operator: This concludes today's conference, and you may disconnect your lines at this time. Thank you for your participation.

Operator: This concludes today's conference and you may disconnect your lines at this time. Thank you for your participation.

Q2 2025 Argan Inc Earnings Call

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