Good evening, ladies and gentlemen, and welcome to the Argan, Inc. Earnings Release Conference Call for the Fiscal Fourth Quarter and Year Ended January 31, 2024. 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 via the webcast. 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.

Thank you. Good evening and welcome to our conference call to discuss Argan’s results for the fourth quarter and fiscal year ended January 31, 2024. 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 but 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. The company's actual results performance or achievements may differ materially from those expressed or implied by these forward-looking statements and some of the factors and risks could cause or contribute to such material differences have been described in this afternoon's press release and in Argan's filings with the US 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. Earlier this afternoon, the company issued a press release announcing its fourth quarter and fiscal 2024 financial results and filed its corresponding Form 10-K Annual Report with the Securities and Exchange Commission. Okay, with that out of the way, I will 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 and Hank Deily, our CFO will go over our financial results for the fiscal fourth quarter and full year ended January 31, 2024. Then we'll open up the call for a brief Q&A. Our solid fourth quarter performance closed out a strong fiscal 2024 for Argan, which included a 26% increase in consolidated revenue to $573.3 million improved profitability and full year EBITDA of $51.3 million. Project backlog grew to $757 million sequentially as compared to the backlog of $730 million at the close of the third quarter. Backlog levels have remained relatively consistent since fiscal 2022 despite significant revenue growth and in the same timeframe. Additionally, we closed fiscal 2024 with more than $400 million of cash and investments, net liquidity of $245 million and no debt. During fiscal 2024, we repurchased approximately 300,000 shares of our common stock pursuant to our stock repurchase program for a total spend of approximately $12.5 million, or $41.11 per share. As we previously mentioned, during the third quarter of fiscal 2024, we increased our quarterly cash dividend by 20% to $0.30 per share for a total dividend of $1.10 per share for the full fiscal year 2024. Slides 4 and 5, present our three reportable business segments. Power Industry Services is comprised of our Gemma Power Systems and Atlantic Projects Company operating units which focused 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 increased 33% to $119 million for the current quarter as compared to $90 million for the fourth quarter of fiscal 2023. The segment represented 73% of our fourth quarter…

Thanks, David, and good afternoon, everyone. On slide 11, we present our consolidated statements of earnings for the fourth quarter and full year of fiscal 2024. Fourth quarter revenues increased 39% to $165 million, reflecting an increase in revenues from both our Power Services and Industrial Services segments as compared to the fourth quarter of fiscal 2023. In the fourth quarter, our power industry services segment, achieved a 33% increase in revenues, primarily related to projects overseas, including the Shannon bridge power project in Ireland, as well as US-based projects, including the Trimble Energy Center and the Midwest solar and battery projects. The increase in revenues of these projects were partially offset by decreased activity associated with the currency power station and the Maple Hill solar facility as those projects reached the final completion stage. In our Industrial Construction Services segment, TRC achieved revenue growth of 64%, driven by a substantial increase in field services, construction projects and supporting steel fabrication work. For the three-month period ended January 31, 2024, our gain reported gross profit of approximately $23.6 million, which represented a gross profit percentage of approximately 14 4% and reflected positive contributions from all three reportable business segments. However, these results were adversely impacted by the recorded loss of $2.1 million related to the Kilroot project. Consolidated gross profit for the comparative quarter ended January 31, 2023 was $20 million, representing a gross profit percentage of 16.9%. Selling general and administrative expenses of $11.9 million for the fourth quarter of fiscal 2024 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 for the corresponding periods from 8.8% to 7.2%. Net income for the fourth quarter of fiscal 2024 was 12 million or $0.89 per diluted…

Thanks Hank. Turning to slide 12. Our consolidated project backlog of $0.8 billion at January 31, 2024 remains fairly consistent with backlog for fiscal 2023. Importantly a backlog includes a healthy group of longer term fully committed projects in both the power industry services and industrial services segments. On slide 13, we present certain major projects currently included in our project backlog. I highlighted earlier our activity at the Trumbull Energy Center in Ohio and that two of the three solar plus battery projects in Illinois have received full notice to proceed. Also included in our project backlog are two separate water treatment plant projects being performed by TRC. Over in Ireland, the three ESB FlexGen Peaker Power Plants and the Shannonbridge thermal plants are both in the final stages of construction and are undergoing commissioning. Following the close of fiscal 2024, we have seen a solid increase in projects coming to market. And as I mentioned earlier there is a growing urgency in the power industry to ensure we have the appropriate facilities and infrastructure to meet the forecasted growth in energy demand. Since year end, we have added to our project backlog as a result of Gemma and TRC entering into several contract agreements including certain LNTPs with several customers. These agreements relate to a large solar facility, a planned natural gas-fired power plant and agreements for other industrial facilities. Our backlog is robust with a diverse group of projects that show our range of capabilities and highlights our reputation as an effective and reliable industry partner. Our balance sheet remained strong at the end of fiscal 2024, we had over $400 million in cash, cash equivalents and investments, generating meaningful investment yields. Our net liquidity was $245 million and we had no debt. Stockholders' equity was $291…

At this time, we will be conducting a question-and-answer session. [Operator Instructions] The first question comes from Rob Brown with Lake Street Capital. Rob, please proceed.

Good afternoon and congratulations on the progress.

Thanks Rob.

When we get a little further color on the pipeline? It sounds like things are starting to loosen up there, and you talked about several things that are that are coming. Trying to get a sense of sort of scaling of what those projects could be in terms of size ranges, and I guess maybe some of the dynamics on listing the project but a flow that's happening?

Sure. I mean, we're -- I mean, as you can tell from my prepared remarks and from discussing a couple of projects that were subsequent to year end, we're really excited about where we stand with our project pipeline both in gas and in renewables. I mean, we received two full notices to proceed during Q4 on a couple of solar battery projects, and based on what we have signed subsequent to year end, and based on the current visibility in our pipeline, we expect some additional large projects over the next six plus months. The new work is going to represent a mix of renewable and gas. We're primarily seeing those gas-fired plant opportunities in the PJM, MISO and especially the ERCOT region, which is basically the Midwest, Texas and to Mid-Atlantic and Southeast. Big picture, we ultimately expect to see our backlog meaningfully exceed where we are today. The gas jobs are remain relatively large in scale, but we're also tracking a number of peaking opportunities. I'd be remiss not to say to keep in mind that the start of future project wins are controlled by the customer, which makes it really difficult to forecast our backlog given the material size of certain projects. Thermal jobs always take longer than we would like, but getting a development job to the finish line is not easy. PJM auction is delayed until the summer, so ideally that unlocks some additional opportunities, and MISO is generally overloaded. So the OEMs are really busy, and that's a true sign that there's a lot of developers out there wanting to start new jobs, and we're here to build those jobs for them.

Yes. Perfect. Great. Thank you. And then I guess are you seeing kind of a renaissance on the gas plant side in terms of the demand environment? I know you say a lot of the drivers there, but are people sort of realizing gas plants are the solution to those demand thing -- demand drivers?

Yes. I think, it's been happening for quite some time now. I mean, we didn't really talk about it, but the demand curve for power has caught a lot of the public utilities and a lot of folks by surprise that about the amount of power that's been needed for the foreseeable future with all the -- between the AIs and the EVs and all the other electrification efforts of the of the overall economy. So there is planning for a lot of natural gas power plants in addition to the tremendous number of renewable projects. And again, we believe we're perfectly situated and positioned to take advantage of both of those tailwinds.

Okay. Great. Thank you. I'll turn it over.

[Operator Instructions] The next question comes from Chris Moore with CJS Securities. Please proceed.

Hey, congratulations on a nice quarter.

Thanks Chris.

Sure. Maybe we'll just follow-up on that demand for power that seems to be growing everywhere. But it looks like from what I've seen the amount of power generation from zero carbon sources in the U.S. was roughly flat year-over-year. 39%. I think in 2023. Solar, significant growth; wind and hydro, down a little bit. But the interesting part is that from a natural gas perspective, I think, 41% was natural gas versus 19 in 2019. So I guess a couple of questions there is trying to figure out what does the level of natural gas as a percentage of power generation that you think would be necessary in order to meet this growing demand? Does it need to stay in this low mid-30s to 40% level? Or can you reach all that demand for AIEV et cetera with a significant increase on the renewable side?

And -- so Chris I mean this is my opinion, but I do believe….

Yes.

That it needs to stay in that 30% to 40% range and that even remain in that 30% to 40% range not only do you need to grow the fleet as the amount of energy being consumed in the country increases, but you also have the dynamic of retirements of natural gas plants are a lot of them that were built in 2000-2001 in addition to baseload coal plants coming off-line you're not going to be able to replace all of that with renewables given the intermittency of those. So 30% to 40% makes sense to me, but you also have the dynamic that I do expect renewables to continue to grow tremendously, but they're not always going and you can't in the batteries are only so long in duration for backup storage. So in a lot of ways you need to have a number of natural gas solutions as well as others out there to backup the renewables. And so maybe those gas plants aren’t running all the time, but they are going to have to run in critical points of time. And so those plants need to be built. And then again that's what we're here to do both building gas and renewables.

Got it. It’s helpful. As I'm trying to find a reasonable number for 2023 in terms of the number of significant natural gas plants that began construction in the US is it a handful or was it is it a double-digit number? I couldn't find any good statistics there?

Yes, the EIA, which is the Energy Information Administration in the US tends to have some good information to look at. I think they expect about in 20 new natural gas-fired power plants to come online in the US, kind of, in the 2024, 2025 time period.

Got it. Last year though it was because of PGM and other reasons -- it was significantly lower than that, correct? I mean, it was single-digit.

Yes, yes. There continues to be significant interconnect challenges both for renewables and gas. Otherwise, I think, the growth in the number of projects kicking off and being built would be more so than what we were expecting to see.

Got it. I'll switch off the gas. So Roberts had another exceptional quarter, exceptional year. Obviously, that growth rate for the year is, we expect that to continue. But can you sustain this 40 million plus run rate that you did in Q4? Is there anything special in Q4 there that you wouldn't be seeing moving forward?

Chris, I'm going to continue to challenge my team down there and they've just done – they've had a tremendous two or three year run, right $40 million in Q4. It was over $30 million in the previous three quarters. And frankly, they exceeded kind of the top ends of like my expectations for the year. The really good data point is frankly their backlog at year end was 120 million and it's increased since then. So I do expect them to continue to add very smaller and larger projects, add members to their team which they've already done and others and being able to increase that growth. Again, obviously, everything's subject to the economy continuing to chug along and – but they're in a sweet spot right now.

Got it. Last one for me is obviously, gross margin was impacted this quarter by Kilroot. You're done with currency. Congratulations on that. Was there any currency excess margin in the gross margin in Q4?

Chris for some reason you were to ask me that question. We are now in the warranty period and the job is effectively complete. We currently saw some further improvements during Q4, as items were closed out and remaining risk were reduced and or eliminated. At the end of the day, we're always committed to delivering the best possible project results each and every time. So the currency job is effectively complete.

All right. I will leave it there. I appreciate it.

Of course.

We have reached the end of the question-and-answer session. I will now turn the call over to David Watson for closing remarks.

Great. Thank you all for participating in today's call. We look forward to speaking with you again, when we report our Q1 fiscal 2025 earnings. Have a great evening.

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