About Argan

Argan, Inc., through its wholly owned subsidiaries, provides a full range of engineering, procurement, construction, commissioning, maintenance, project development and technical consulting services to the power generation market, including the renewable energy sector. The wide range of customers includes independent power project owners, public utilities, power plant heavy equipment suppliers and other commercial firms with significant power requirements. Projects are located in the United States (the U.S.), the Republic of Ireland (Ireland) and the United Kingdom (the U.K.). Through TRC, the industrial fabrication and field services segment provides primarily on-site services that support new plant construction and additions, maintenance turnarounds, shutdowns and emergency mobilizations for industrial plants primarily located in the Southeast region of the U.S. and that may include the fabrication, delivery and installation of steel components, such as piping systems and pressure vessels. Through SMC, which conducts business as SMC Infrastructure Solutions, the telecommunications infrastructure services segment provides project management, construction, installation and maintenance services to commercial, local government and federal government customers primarily in the Mid-Atlantic region of the U.S. The company’s subsidiaries include Gemma Power Systems, LLC and affiliates (GPS); Atlantic Projects Company Limited and affiliates (APC); The Roberts Company, Inc. (TRC); and Southern Maryland Cable, Inc. (SMC). Segments The company operates through Power Industry Services, Industrial Fabrication and Field Services, and Telecommunications Infrastructure Services segments. Power Industry Services segment The most significant percentage of the company’s power industry services has been performed by GPS which is a full-service engineering, procurement and construction (EPC) services firm that it has operated for over sixteen years. GPS has the proven abilities of designing, building and commissioning large-scale energy projects primarily in the U.S. The extensive design, construction, project management, start-up and operating experience of GPS has grown with installed capacity exceeding 16 gigawatts of mostly domestic power-generating capacity. The company’s power projects have included base-load combined-cycle facilities, simple-cycle peaking plants and boiler plant construction and renovation efforts. GPS also has experience in the renewable energy sector by providing EPC contracting and other services to the owners of alternative energy facilities, including biomass plants, wind farms and solar fields. Typically, the scope of work for GPS includes complete plant engineering and design, the procurement of equipment and construction from site development through electrical interconnection and plant testing. The durations of the company’s construction projects typically range between one to three years. This reportable business segment also includes APC, and its affiliated companies, which it acquired in May 2015. Historically, APC primarily provided turbine, boiler and large rotating equipment engineering, procurement, installation, commissioning and outage services to power plants in Ireland. Since the acquisition of APC in 2015, it has expanded operations to the U.K. and more recently focused on the performance of engineering and construction services for the major electric utility in Ireland, independent power plant owners, major data center operators and original equipment manufacturers. With its primary presence in Ireland and the U.K., APC leads this segment’s international focus. Project Backlog Typically, the company includes the total value of EPC services and other major construction contracts in project backlog when it receives a corresponding notice to proceed from the project owner. Major Projects The significant active projects of the company’s power industry services segment include the construction of the facilities described below, which together represent nearly 3.8 gigawatts of potential electrical power and require the significant engagements of its technical, project support and project management teams. Guernsey Power Station In January 2019, GPS entered into an EPC services contract to construct an 1,875 MW natural gas-fired power plant in Guernsey County, Ohio (the Guernsey Power Station). Caithness Energy, L.L.C. (Caithness) led the development of this project. After receiving a full notice-to-proceed, GPS commenced substantial activities for this project in August 2019. The substantial completion milestones have been achieved for all three of this plant’s natural gas-fired turbines. GPS expects to achieve the final completion of this project during the third quarter of the year ending January 31, 2024 (Fiscal 2024). Guernsey County is located in southeastern Ohio in the heart of the state’s Utica and Marcellus shale gas development area. Using state-of-the-art combined cycle technology and air-cooling system, the Guernsey Power Station will be an electricity generating power plant that protects air quality and conserves water with the capability to satisfy the electricity needs of approximately one million homes. The combined cycle design of this plant utilizes three power trains, with each one including a gas-fired turbine, a heat recovery steam generator and a steam turbine, that will enable this plant to generate significantly more power from the equivalent amount of fuel than a traditional gas-fired power plant. The Guernsey Power Station will also use dry cooling technology to reduce water usage by as much as 95% compared to a water-cooled power plant. Trumbull Energy Center In November 2022, the company announced that it received the full notice to proceed with EPC activities for the Trumbull Energy Center, a 950 MW natural gas-fired power plant to be built in Lordstown, Ohio, from Clean Energy Future-Trumbull, LLC. The company began contract activities immediately. This combined cycle power station will consist of two Siemens Energy SGT6-8000H gas-fired, high efficiency, combustion turbines with two heat recovery steam generators and a single steam turbine. Contract completion is scheduled to occur by the end of the year ending January 31, 2026 (Fiscal 2026). Kilroot Power Station In October 2021, APC entered into an engineering and construction services contract with EPUKI London, U.K., to construct a 2 x 330 MW natural gas-fired power plant in Carrickfergus, a location that is near Belfast, Northern Ireland. The Kilroot project was developed by EPNI Energy Limited. Full project activities are underway; the overall completion of this project is expected to occur by the end of Fiscal 2024. ESB FlexGen Peaker Plants In May 2022, APC entered into engineering and construction services contracts with Ireland’s Electricity Supply Board (ESB) to construct three 65 MW aero-derivative gas turbine flexible generation power plants in and around the city of Dublin, Ireland. Two of the power plants, the Poolbeg and Ringsend FlexGen Power Plants, will be located on the Poolbeg Peninsula, and the Corduff FlexGen Power Plant will be built in nearby Goddamendy. All three projects cleared the applicable capacity auction in calendar 2022 and are expected to operate intermittently during peak periods of electricity demand and as back-up supply options when renewable electricity generation is limited. A full notice to proceed has been received and project activities have commenced. The completion of each power plant is expected to occur by the end of Fiscal 2024. Maple Hill Solar In May 2021, the company announced that GPS entered into an EPC services contract with CPV Maple Hill Solar, LLC, an affiliate of Competitive Power Ventures, Inc. (CPV), to construct the Maple Hill Solar facility, which will be among the largest solar-powered energy plants in Pennsylvania. Pursuant to an extension to the project schedule that was coordinated with the project owner, the completion of this effort is scheduled to occur during the second half of Fiscal 2024. The unique Maple Hill Solar project, which is located in Cambria County, Pennsylvania, is being constructed using over 235,000 photovoltaic modules to generate up to approximately 100 MW alternating current electrical power. Other Construction Works APC was provided with limited notices to proceed with EPC contract activities for an open-cycle gas turbine power facility in central Ireland that will have the capacity to generate approximately 264 MW of temporary emergency electrical power. GPS is teaming with APC in the performance of this contract. The staff at GPS has also begun efforts pursuant to limited notices to proceed with contract activities for the conversion of three coal-fired power plants to solar energy facilities, with supporting battery-storage, while exclusive negotiations are conducted between GPS and a large integrated retail electricity and power generation company for the corresponding EPC services contract. During Fiscal 2023, the Irish operations of APC substantially completed the design and build of a dedicated power plant within a major data center. The size and configuration of the facility, consisting of nine gas-fired turbines, is a first-of-a-kind within the Irish data center market. During Fiscal 2023, the Irish operations also completed construction activities for a major chip manufacturer. Both of these facilities are located near Dublin. Finally, during Fiscal 2023, the U.K. operations of APC completed the installation of a synchronized condenser for the combined cycle, gas-fired power plant located at the Isle of Grain site in the Kent region of the U.K. On the other hand, in May 2019, GPS entered into an EPC services contract to construct a 625 MW power plant in Harrison County, West Virginia. As a limited notice to proceed with certain preliminary activities was received from the owner of this project at the time (a repeat customer), the value of the contract was added to the company’s project backlog. However, meaningful milestones were not achieved and management concluded that the value of this power plant should be removed from project backlog during Fiscal 2023. Over the past five years, GPS was awarded six EPC service contracts, which represented gas-fired power plant projects with electricity generating capacity exceeding 5 gigawatts for which the commencement of project activities has been delayed or cancelled. The company has maintained that the delays in the construction starts of these projects and the awards of new business awards to GPS relate to a variety of factors, especially in the northeastern and Mid-Atlantic regions of the U.S. where the largest electricity grid is run by PJM Interconnection LLC (PJM). Certain projects in development are confronting difficulties in obtaining the necessary permits for construction and operation, in securing the delivery of fuel to the power plant site and in establishing the necessary power connection to the electricity grid. The company is targeting certain business development efforts to win projects for the erection of utility-scale wind farms and solar fields, as well as the construction of other renewable energy projects. The company is also pursuing hydrogen-based energy plants and carbon capture and storage projects. Special Purpose Entities The company selectively participates in power plant project development and related financing activities to maintain a proprietary pipeline for future EPC services contract opportunities, to secure exclusive rights to EPC contracts, and to generate profits through interest income and project development success fees. EPC contractors in the company’s industry also periodically execute certain contracts jointly with third parties through joint ventures, limited partnerships and limited liability companies for the purpose of completing a project or program for a project owner. These special purpose entities are generally dissolved upon completion of the corresponding project or program. For example, through variable interest entities, the company entered into support arrangements with independent parties in the past that resulted in the successful development and its construction of three separate gas-fired power plant. The company entered into joint venture arrangements in order to secure greater bonding capacity. These arrangements were dissolved upon the successful completion of the corresponding EPC service contracts. In January 2018, the company determined that it was the primary beneficiary of a variable interest entity that was performing the project development activities related to the construction of the Chickahominy Power Station. GPS provided financing to the entity for the development efforts pursuant to promissory notes. Customers For Fiscal 2023 (year ended January 31, 2023), the company’s most significant customer was Guernsey Power Station LLC, the owner of the Guernsey Power Station project, which accounted for approximately 38% of its consolidated revenues. Additionally, during Fiscal 2023, EPNI Energy Limited, the developer of the Kilroot Power Station, accounted for approximately 12% of its consolidated revenues. Industrial Fabrication and Field Services TRC and its fabrication facility and offices are located near Greenville, North Carolina. TRC is a construction and field services firm with steel pipe and vessel fabrication capabilities serving industrial organizations primarily in the Southeast region of the U.S. TRC operates within its own reportable business segment, industrial fabrication and field services. Industrial field services typically represent over 75% of TRC’s annual revenues with the remaining revenues contributed by projects consisting solely of metal fabrication. The major customers of TRC include Nutrien Ltd., the global fertilizer company; Livent Corporation, a global lithium technology company; Jacobs Solutions Inc., an international engineering and construction firm that is building a significant biotechnology manufacturing facility in the research triangle area of North Carolina; OceanaGold Corporation, a gold-mining company located in South Carolina; Air Liquide S.A., a world-leading supplier of industrial gases; as well as Weyerhaeuser Company and Domtar Corporation, two of North America’s largest forest products companies; and various other industrial companies. Telecommunications Infrastructure Services SMC represents the company’s telecommunications infrastructure services business segment and conducts business as SMC Infrastructure Solutions, which provides utility construction services and comprehensive technology wiring solutions to customers primarily in the Mid-Atlantic region of the U.S. SMC performs both outside and inside plant cabling. Services provided to the company’s outside premises customers include trenchless directional boring and excavation for underground communication and power networks, aerial cabling services, and the installation of buried cable, high and low voltage electric lines, and private area outdoor lighting systems. The outside premises services are primarily provided to the area’s electricity cooperative, state and local government agencies, regional communications service providers and other commercial customers. The wide range of inside premises wiring services provided to SMC’s customers include structured cabling, terminations and connectivity that provide the physical transport for high-speed data, voice, video and security networks. These services are provided primarily to contractors, other commercial firms and federal government installations, including cleared facilities, on a direct and subcontract basis. Customer facilities typically require regular upgrades to their wiring systems in order to accommodate improvements in security, telecommunications and network capabilities. Consistently, a major portion of SMC’s revenue-producing activity each year is performed pursuant to task or work orders issued under master agreements with SMC’s major customers such as Southern Maryland Electric Cooperative, a local electricity cooperative. Over the last three years, other major customers have included counties and municipalities located in Maryland; certain state government agencies in Maryland; and technology-oriented government contracting firms in the Washington, D.C. metropolitan area. Late in 2022, SMC acquired the business of Lee Telecommunications, Inc. (LTI), which expanded the business footprint of SMC into the Tidewater area of Virginia. LTI provides a suite of inside premises, communications infrastructure services similar to those provided by SMC. The largest customer of LTI is Newport News Shipbuilding, a division of Huntington Ingalls Industries, to which it has been providing services. History Argan, Inc., a Delaware corporation, was founded in 1961. The company was incorporated in 1961.