ARGAN INC
For the period ended Apr 30, 2025. Filed Jun 4, 2025.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Apr 30, 2025 · Filed Jun 4, 2025
AGX$277.50+6.2%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-10-31; filed 2024-12-05.
0001558370-24-016050
Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSCurrent report: 10-Q
Period ended 2025-04-30; filed 2025-06-04.
0001558370-25-008397
Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 153 previous paragraphs and 85 current paragraphs.
27 unchanged; 30 reworded; 26 added; 91 removed; 5 previous and 2 current paragraphs rearranged.
Tables are not compared: 4 previous and 2 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (26)
Current report
The majority of our consolidated revenues relate to performance in the U.S. by the power industry services reportable business segment, which provides EPC services to design, build, and commission large-scale energy projects. In the U.S., electricity demand has reached its highest level in two decades, driven by the expansion of data centers supporting artificial intelligence technologies, the growing adoption of electric vehicles, and the reshoring of manufacturing activities. Keeping up with growing energy demand is further challenged by the aging fleet of traditional power facilities that are at or nearing the end of their operational lives. Throughout the U.S., the risk of electricity shortages grows as the retirement of traditional power plants outpaces their replacements. While renewable energy sources like solar and wind are expanding, they often cannot provide the same level of consistent, around-the-clock power generation as the retiring thermal plants. Natural gas-fired power plants are expected to remain a key component of future capacity additions due to their cost-effectiveness, reliability, and ability to support intermittent energy sources.
Current report
Utility-scale solar, wind, and battery storage projects continue to expand their share of electricity generation, supported by declining capital costs, improved energy storage systems that enhance grid reliability, and supportive tax incentives. Despite their increasing cost competitiveness and their rapid deployment over the past several years, the long-term trajectory of renewables could be influenced by shifts in energy policy and evolving regulatory frameworks.
Current report
Recent changes in U.S. trade policy, including the implementation of new or increased tariffs, have introduced cost and supply chain uncertainties affecting certain construction materials and equipment. Tariffs on imported materials, including steel and aluminum, could significantly impact the cost of building power plants. Tariff measures may also cause import delays, increasing lead times necessary for materials to arrive at our construction sites. The resulting rise in material costs and delivery delays could lead to higher overall project expenses and changes to project timelines. As the current U.S. administration’s approach to tariffs remains fluid at this time, the full extent of these effects remains uncertain. We continue to monitor developments closely, as prolonged or expanded trade restrictions could negatively affect project costs, timing, and customer demand.
Current report
At April 30, 2025 and January 31, 2025, our consolidated project backlog amounts of $1.9 billion and $1.4 billion, respectively, consisted substantially of projects within our power industry services reporting segment.
Current report
Our reported project backlog at a point in time represents the expected revenue from the remaining work on projects where the scope is sufficiently defined and the contract value can be reasonably estimated. While the inclusion of contract values in project backlog involves management judgment based on the facts and circumstances, we typically include the value of the contract in project backlog upon receiving a notice to proceed from the project owner. In making the determination of project backlog, management may consider several factors, including terms of the contract, the degree of project financing and permitting, and historical experience with similar contracts. The start of new projects is primarily controlled by project owners and delays may occur that are beyond our control.
Current report
Sandow Lakes Power Station
Current report
In April 2025, wereceived a notice to proceed on an EPC services contract for a 1.2 GW combined-cycle natural gas-fired power plant in Lee County, Texas. Construction is expected to begin during the summer of Fiscal 2026, with an expected project completion date in 2028.
Current report
Tarbert Next Generation Power Station
Current report
In January 2025, we entered into an EPC services contract for an approximately 300 MW biofuel power plant located in County Kerry, Ireland. The Tarbert Next Generation Power Station will run on 100% sustainable biofuels, specifically hydrotreated vegetable oil, with the potential to convert to hydrogen. Enabling works are now underway ahead of full construction commencing Fiscal 2026 with planned completion towards the end of the calendar year 2027.
Current report
700 MW Combined-Cycle Project
Current report
In December 2024, weentered into an EPC services contract and received the corresponding full notice to proceed (“FNTP”) with a customer for an approximately 700 MW combined-cycle natural gas-fired power plant located in the U.S. Project activity commenced in the fourth quarter of Fiscal 2025. Project completion is scheduled for the fiscal year ending January 31, 2028.
Current report
In August 2024, we received FNTP on an EPC services contract to construct a utility-scale solar field in Illinois with the capacity to provide 405 MW of electrical power. Project completion is scheduled for the first half of Fiscal 2027.
Current report
In November 2022, we received FNTP on an EPC services contract for a 950 MW combined-cycle natural gas-fired power plant in Lordstown, Ohio. Project completion is scheduled for the first quarter of Fiscal 2027.
Current report
Industrial Construction Services Project Backlog
Current report
As of April 30, 2025, the industrial construction services segment’s project backlog was approximately $91.4 million as compared to $53.2 million on January 31, 2025. During the three months ended April 30, 2025, the industrial construction services segment added contracts to its project backlog related to a water treatment plant and other industries.
Current report
The revenues of telecommunications infrastructure services were $4.1 million for the three months ended April 30, 2025, compared with revenues of $3.7 million for the three months ended April 30, 2024.
Current report
Income Tax Expense
Current report
Financing Arrangements
Current report
At April 30, 2025, we did not have any borrowings outstanding under the Credit Agreement. However, the Bank has issued a letter of credit in the total outstanding amount of $0.3 million at April 30, 2025.
Current report
Performance Bonds and Guarantees
Current report
When sufficient information about claims related to performance on projects would be available and monetary damages or other costs or losses would be determined to be probable, we would record such losses. As our subsidiaries are wholly owned, any actual liability related to contract performance is ordinarily reflected in the financial statement account balances determined pursuant to the Company’s accounting for contracts with customers. Any amounts that we may be required to pay in excess of the estimated costs to complete contracts in progress as of April 30, 2025 are not estimable.
Current report
Solar Energy Project Investments
Current report
Development Financing
Current report
We selectively participate in power plant project development and related financing activities 1) to maintain a proprietary pipeline for future EPC services contract opportunities, 2) to secure exclusive rights to EPC contracts, and 3) to generate profits through interest income and project development success fees.
Current report
In Fiscal 2025, we funded a loan to a special purpose entity in the amount of $5.0 million to support the development phase of a natural gas-fired power plant, which remains outstanding as of April 30, 2025. We may enter into other support arrangements in the future in connection with power plant development opportunities when they arise and when we are confident that providing early financial support for the projects will lead to the award of the corresponding EPC contracts to us.
Current report
There have been no material changes in our critical accounting policies and estimates from those disclosed in our Annual Report filed with the SEC on March 27, 2025.
Removed paragraphs (91)
Previous report
At October 31, 2024 and January 31, 2024, our consolidated project backlog amounts were each $0.8 billion, which consisted substantially of the projects of the power industry services reporting segment. Our reported amount of project backlog at a point in time represents the total value of projects awarded to us that we consider to be firm as of that date less the amounts of revenues recognized to date on the corresponding projects.
Previous report
Typically, we include the total value of EPC services and other major construction contracts in project backlog upon receiving a notice to proceed from the project owner. When provided with a limited notice to proceed (“LNTP”), we usually add only the value of the contract related to the LNTP initially. Nevertheless, the inclusion of contract values in project backlog may require management judgement based on the facts and circumstances.
Previous report
It is important to note that the start of new projects is primarily controlled by project owners and that delays may occur that are beyond our control. However, we continue to pursue natural gas-fired power plant, renewable energy plant and industrial construction opportunities in the U.S., Ireland and the U.K. Our vision is to safely contribute to the construction
Previous report
In April 2024, GPS executed a LNTP with a customer to construct a utility-scale solar field in Illinois that will provide 405 MW of electrical power (the “405 MW Midwest Solar Project”). In August 2024, GPS received a full release for the activities on the EPC contract. The unique, multi-phased project includes solar-tracking panels that can be stowed by remote command for expected adverse weather events and will use pre-existing transmission and utility infrastructure from a nearby retired coal power plant. Project completion is scheduled for the first half of the fiscal year ending January 31, 2027.
Previous report
In October 2022, GPS added to project backlog the EPC services contract value of the Trumbull Energy Center, a 950 MW natural gas-fired power plant now under construction in Lordstown, Ohio (the “Trumbull Energy Center”). We received the full notice to proceed (“FNTP”) from the project owner, Clean Energy Future-Trumbull, LLC, in November 2022. 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. Project completion is scheduled for the last quarter of Fiscal 2026.
Previous report
Shannonbridge Power Project
Previous report
APC entered into an EPC services contract with GE Vernova for the construction and commissioning of an open-cycle thermal power facility in County Offaly, Ireland, that has the capacity to generate approximately 264 MW of temporary emergency electrical power (the “Shannonbridge Power Project”). In August 2023, APC received the FNTP on this project. Substantial completion of this project, that is defined in the corresponding contract as system turnover for commissioning, occurred in March 2024.
Previous report
ESB FlexGen Peaker Plants
Previous report
In May 2022, APC entered into engineering and construction services contracts with the ESB to construct three 65 MW aero-derivative gas turbine flexible generation power plants in and around the city of Dublin, Ireland (“ESB FlexGen Peaker Plants”). Two of the power plants, the Poolbeg and Ringsend FlexGen Power Plants, are located on the Poolbeg Peninsula, and the Corduff FlexGen Power Plant is located in nearby Goddamendy. All three projects cleared the applicable capacity auction in Fiscal 2023 and are expected to operate intermittently during peak periods of electricity demand and as back-up supply options when renewable electricity generation is limited. Substantial completion of each power facility occurred during the quarter ended October 31, 2024.
Previous report
Kilroot Power Station
Previous report
In October 2021 and pursuant to the Kilroot Project, APC was contracted to construct a 2 x 330 MW natural gas-fired power plant in Carrickfergus that is near Belfast, Northern Ireland, in an existing structure that was initially designed to enclose coal-fired power plant units.
Previous report
As previously disclosed, there were a number of challenges related to the Kilroot Project that adversely impacted our ability to execute as expected, including supply chain delays, material changes to the project, the COVID-19 omicron outbreak, the war in Ukraine and extreme weather. In addition, unresolved variations and claims disrupted the execution and harmed the cash flow of this project.
Previous report
APC provided 14 days’ notice to terminate as a result of project owner breaches of the contract. Those breaches were not resolved during that 14-day period, as a result of which the contract terminated on May 3, 2024. Subsequently, the project owner made a draw for the full amount of a $9.2 million irrevocable letter of credit, or on-demand performance bond, issued by the Company’s bank. This amount is now part of the open and disputed claims related to this project because APC and the Company believe the project owner initiated the draw without cause and, therefore, the amount should be refunded. This amount is included in accounts receivable as of October 31, 2024.
Previous report
We have recognized an estimated contract loss related to the Kilroot Project in the amount of approximately $12.6 million, of which $2.6 million was recorded during the nine-month period ended October 31, 2024 and the remainder was recorded in the prior fiscal year. APC has significant unresolved contract variations and claims for extensions of time, among other issues, related to the Kilroot Project. The project owner has asserted counterclaims that APC disputes. APC will continue to pursue all of its rights under the contract, and will do so through legal means if necessary.
Previous report
TRC Project Backlog
Previous report
As of October 31, 2024, TRC’s project backlog was approximately $66.4 million as compared to $127.5 million on January 31, 2024. For the nine months ended October 31, 2024 and 2023, TRC generated $134.7 million and $101.5 million in revenues, respectively. The increase in revenues for the current year from the comparative prior period highlights the results of our successful business development efforts with both new and recurring clients during Fiscal 2023 and Fiscal 2022, particularly in securing larger industrial field service construction projects. Despite the decrease in the amount of TRC’s project backlog during the current year, we are encouraged by the number and size of opportunities in our project pipeline, and we expect the TRC project backlog will increase next year.
Previous report
Growing Power Demand
Previous report
Since 2007, total annual U.S. electricity demand has fluctuated, where eight of the years during that period experienced year-over-year decreases in energy consumption. However, U.S. electricity demand has since reached its highest level in two decades, reflecting a surge in consumption driven by emerging technologies and economic shifts. In the reference case of its most recently published Annual Energy Outlook released in March 2023 (as would be customary, the U.S. Energy Information Administration (the “EIA”) did not publish a report in early 2024), the EIA projected that economic growth paired with increasing electrification in end-user sectors would result in notable growth of electricity demand in the U.S. through 2050.
Previous report
One prominent driver of this surge in energy demand is the rapid rise of data centers, which are expanding to support the growing adoption of artificial intelligence technologies. These facilities require substantial amounts of electricity to power advanced computing infrastructure, positioning them as a major contributor to future electricity demand. Technology companies with artificial intelligence ambitions have begun exploring deals to bring more power to the grid in order to secure long-term power contracts to address their significant electricity demand. Additionally, the accelerating shift toward electric vehicles (“EVs”) is reshaping the transportation landscape. As more drivers transition to EVs, the need for electricity to power charging networks will grow significantly, further straining grid capacity. Finally, the trend of onshoring manufacturing facilities is adding to the demand for electricity. Companies relocating production to the U.S. to enhance supply chain resilience are increasing the energy requirements of industrial operations. Combined, these factors underscore a growing imperative for the U.S. energy sector to adapt to rising electricity demands in the coming decades.
Previous report
Natural Gas Power
Previous report
The overall growth of our power business has been substantially based on the number of combined cycle gas-fired power plants built by us, as many coal-fired plants have been shut down in the U.S. In 2010, coal-fired power plants accounted for about 45% of net electricity generation in the U.S. For 2023, coal fueled approximately 17% of net electricity generation. It has been reported that the average age of the active plants in the coal-fired fleet approximates 45 years old with an average life span of 50 years; the last coal-fired power plant built in the U.S. was constructed in 2015. On the other hand, natural-gas fired power plants provided approximately 42% of the electricity generated by utility-scale power plants in the U.S. in 2023, representing an increase of 70% in the amount of electrical power generated by natural gas-fired power plants since 2010. Natural gas-fired power plants provided approximately 24% of net electricity generation in 2010.
Previous report
In November 2023, Texas voters approved the $5 billion Texas Energy Fund (“TEF”) to enhance grid reliability and incentivize new dispatchable power generation projects, with a significant focus on natural gas-fired power plants. Shortly thereafter, the Public Utility Commission of Texas selected 17 natural gas-fired generation projects, totaling nearly 10 GW, to advance through a due diligence review, representing $5.4 billion in potential state-backed loans. If all projects proceed, initial disbursements are anticipated by the end of 2025, and the TEF could expand to $10 billion under a proposal from Governor Greg Abbott.
Previous report
There exist certain headwinds confronting a significant resurgence in the pace of planning new developments of gas-fired power plants. Persistent supply chain constraints, which delay critical equipment delivery, and interconnect challenges that complicate grid integration delay project timelines and strain project financing. In addition, various cities, counties and states have adopted clean energy and carbon-free goals or objectives with achievement expected by a certain future date, typically 10 to 30 years out.
Previous report
Solar and Wind Power
Previous report
The net amount of electricity generation in the U.S. provided by utility-scale solar photovoltaic and wind facilities continues to rise. Together, such power facilities provided approximately 12%, 13% and 15% of the net amount of electricity generated by utility-scale power facilities in 2021, 2022 and 2023, respectively. The EIA projected that new photovoltaic solar and wind capacity will continue to be added to the utility-scale power fleet in the U.S. at a brisk pace, attributable to declines in costs of renewable power plants and power storage, an increase in the scale of energy storage capacity (i.e., battery farms and other energy storage technologies), the availability of valuable tax credits, and the overall political commitment to renewable energy.
Previous report
Declining capital costs for solar panels, wind turbines and battery storage, as well as government subsidies like those included in the Inflation Reduction Act of 2022 (the “IRA”), were projected to result in renewables becoming increasingly cost effective compared with the alternatives when the costs of building new power capacity were considered. The EIA indicated that for 2024, of the approximately 62.8 gigawatts of new utility-scale electric-generating capacity that was planned to be added to U.S. power grids, approximately 71% was expected to come from solar and wind facilities.
Previous report
Nuclear Power
Previous report
Over the last several decades, the number of operating nuclear reactors has declined. Only four nuclear reactors have entered into commercial operation in the last thirty years, the most recent being the Vogtle Units 3 and 4, located in Georgia, which entered into commercial operations in July 2023 and April 2024, respectively. Suffering significant cost overruns—more than twice the initial estimates—and substantial delays, the Vogtle units have caused the industry to shift focus to smaller, more economical designs. The deployment of small modular reactors could mean lower construction and electricity costs through the use of simpler power plant designs, standardized components and passive safety measures.
Previous report
The Regulatory Landscape
Previous report
In August 2022, President Biden signed the IRA, a climate and healthcare bill that funds hundreds of billions of dollars in tax subsidies intended to combat climate change among other measures. However, it appears that receipt of the majority of the tax subsidies will be conditioned on the extent that taxpayers “buy American” and/or pay prevailing wages, among other requirements. Existing supply chains and skilled labor pools may lack the capacity to meet the demand that the incentives are intended to create. Therefore, the subsidies may not provide the economic incentives to renewable and other
Previous report
energy project owners to the extent that was expected. Furthermore, the IRA may face challenges from the new administration.
Previous report
In May 2023, the Biden administration proposed new rules for the Environmental Protection Agency (the “EPA”) that are intended to drastically reduce greenhouse gases from coal- and gas-fired power plants that officials admit will cost such plants billions of dollars to comply fully by 2042. In April 2024, the EPA issued final rules that require coal-fired power plants that are expected to operate beyond 2039 to reduce their carbon emissions by 90% prior to 2032. For new gas-fired power plants, the rules require a sliding scale of carbon capture up to 90% based on the operational load of the individual power plant. Rules for existing natural gas power plants have been delayed until 2025 in response to concern that such rules could affect grid reliability. More recently, President-elect Trump has expressed strong opposition to the EPA’s emissions-regulating rules and has pledged to abolish them.
Previous report
In June 2023, President Biden signed a bill that raised the debt ceiling, which also included reforms for certain elements of the permitting process for energy projects. The bill imposes certain timelines for federal agencies to review and to approve elements of major energy projects and includes provisions designating a single agency to take the lead on the environmental review process. Such streamlining of the current permitting process for energy generating facilities could ease certain constraints on the power industry.
Previous report
In May 2024, the Biden administration launched the Federal-State Modern Grid Deployment Initiative, a collaborative measure between the federal government and twenty-one states intended to prioritize efforts that support the adoption of modern grid solutions to expand grid capacity and build modern grid capabilities for both new and existing transmission and distribution lines.
Previous report
During his campaign and subsequent to his election, President-elect Trump has indicated his intent to impose heavy tariffs on imports from several nations, including Mexico, Canada, and China. These measures aim to address broader policy goals but could introduce supply chain inefficiencies, challenge current trade agreements with certain nations, and affect the cost and availability of materials critical to project execution.
Previous report
The Power Grid Transition
Previous report
Throughout the U.S., the risk of electricity shortages grows as the retirement of traditional power plants outpaces their replacement by renewable energy. Electric-grid operators are warning that power-generating capacity is struggling to keep up with demand. The challenge is that solar and wind farms do not produce electricity at all times, and they need large batteries to store their output for later use.
Previous report
PJM Interconnection LLC (“PJM”) published a study in February 2023 that supported the growing concern that the reliability of power grids is being eroded by the rush to renewable power. The study indicates that the growth rate of electricity demand in the PJM footprint is likely to increase from electrification (i.e., shifts to electric-powered automobiles, electric appliances, etc.) coupled with the proliferation of high-demand data centers in the region. Thermal power generation facilities are being retired at a rapid pace, creating the risk that such retirements may outpace the construction of new power-generating facilities as PJM’s interconnection queue includes primarily intermittent and limited-duration renewable energy resources. Given the operating characteristics of renewable energy facilities and the weather, PJM will need multiple megawatts of renewable power and accompanying battery storage, and improvements in the transmission network, to replace a single megawatt of retired thermal generation.
Previous report
Additionally, solar and wind energy plant developers continue to confront the problems caused by grid congestion, often unsuccessfully. Many of these projects have been canceled because renewable plants need to be sited where the resources are optimal, often in remote locations where the transmission systems are not robust as power is consumed substantially in urban areas. The costs associated with the necessary grid upgrades may be prohibitive.
Previous report
Some of our recently completed and awarded EPC service contracts relate to the construction of natural gas-fired power plants located within the Mid-Atlantic geographic footprint of PJM, which operates a capacity market to ensure long-term grid reliability by securing the appropriate amount of power supply resources needed to meet forecasted energy demands in its region. Capacity payments by PJM represent meaningful portions of the revenue streams of qualifying power plants.
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Reworded paragraphs (30)
Previous wording
The following discussion summarizes the financial position of Argan, Inc. and its subsidiaries as of October 31, 2024, and the results of their operations for the three and nine month periods ended October 31, 2024 and 2023, and should be read in conjunction with (i) the unaudited condensed consolidated financial statements and notes thereto included elsewhere in this Quarterly Report on Form 10-Q and (ii) the consolidated financial statements and accompanying notes included in our Annual Report on Form 10-K for Fiscal 2024 that was filed with the SEC on April 11, 2024 (the “Annual Report”).
Current wording
The following discussion summarizes the financial position of Argan, Inc. and its subsidiaries as of April 30, 2025, and the results of their operations for the three month periods ended April 30, 2025 and 2024, and should be read in conjunction with (i) the unaudited condensed consolidated financial statements and notes thereto included elsewhere in this Quarterly Report on Form 10-Q and (ii) the consolidated financial statements and accompanying notes included in our Annual Report on Form 10-K for Fiscal 2025 that was filed with the SEC on March 27, 2025 (the “Annual Report”).
Previous wording
developments affecting us will be those that we anticipate. All comments concerning our expectations for future revenues and operating results are based on our forecasts for existing operations and do not include the potential impact of any future acquisitions.
Current wording
Our forward-looking statements, financial position and results of operations, are based on our current expectations and beliefs concerning future developments and their potential effects on us. There can be no assurance that future developments affecting us will be those that we anticipate. All comments concerning our expectations for future revenues and operating results are based on our forecasts for existing operations that do not include the potential impacts of any future acquisitions.
Previous wording
The Company is primarily a construction firm that conducts operations through its wholly-owned subsidiaries, GPS, APC, TRC and SMC. Through GPS and APC, we provide a full range of engineering, procurement, construction, commissioning, maintenance, project development and technical consulting services to the power generation market for a wide range of customers, including independent power project owners, public utilities, power plant equipment suppliers and other commercial firms with significant power requirements in the U.S., Ireland and the U.K. GPS and APC represent our power industry services reportable segment. Through TRC, the industrial construction services reportable 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.
Current wording
consulting services to the power generation market. The customers include primarily independent power producers, public utilities, power plant equipment suppliers and other commercial firms with significant power requirements. Customer projects are located in the U.S., Ireland and the U.K. Our industrial construction services segment provides on-site services that support new plant construction and additions, maintenance turnarounds, shutdowns and emergency mobilizations for industrial operations 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. Our 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.
Previous wording
We are committed to the construction of state-of-the-art, natural gas-fired power plants, as important elements of our country’s electricity-generation mix now and in the future. This represents our core business. In addition, we have been directing meaningful business development efforts to winning EPC services projects for primarily utility-scale solar fields, but also wind farms, hydrogen-based energy projects, battery energy storage projects, and other industrial projects in order to diversify the sources of revenues. At October 31, 2024, approximately 60.0% of our project backlog related to renewable energy projects. For the three and nine months ended October 31, 2024, the amounts of revenues earned by us and associated with renewable energy projects were 42.7% and 38.7%, respectively, of corresponding revenues for the power industry services segment. We have successfully completed alternative energy projects in the past and we have renewed efforts to obtain new work in sectors of the power market that will complement our natural gas-fired EPC services projects going forward.
Current wording
We are committed to the construction of state-of-the-art, natural gas-fired power plants, as important elements of our country’s electricity-generation mix now and in the future. We target natural gas-fired power plants, renewable energy plants and industrial construction opportunities in the U.S., Ireland and the U.K. Our vision is to safely contribute to the
Previous wording
of the energy infrastructure and state-of-the-art industrial facilities that are essential to future economic prosperity in the areas where we operate. We intend to realize this vision with motivated, creative, high-energy and customer-driven teams that are committed to delivering the best possible project results each and every time.
Current wording
construction of the energy infrastructure and state-of-the-art industrial facilities that are essential to future economic prosperity in the areas where we operate. We intend to realize this vision with motivated, creative, high-energy and customer-driven teams that are committed to delivering the best possible project results each and every time.
Previous wording
In June 2024, GPS entered into a subcontract and received FNTP for the installation of five 90 MW gas turbines for the dedicated supply of power to a liquified natural gas (“LNG”) facility in Louisiana. This project, led by GPS, is a collaboration with TRC and APC. Project completion is scheduled for Fiscal 2026.
Current wording
In June 2024, we entered into a subcontract and received FNTP for the installation of five 90 MW gas turbines for the dedicated supply of power to a liquified natural gas (“LNG”) facility in Louisiana. This project, led by our power industry services segment, is a collaboration with our industrial construction services segment. Project completion is scheduled for the first half of Fiscal 2026.
Previous wording
In August 2023, GPS executed LNTPs with a customer for three solar and battery projects in Illinois (the “Midwest Solar and Battery Projects”). Under the LNTPs, GPS commenced early engineering and design activities as well as procurement of major equipment for construction of state-of-the-art solar energy and battery energy storage facilities. Between January and early May 2024, GPS received FNTPs on all three of the solar and battery projects. The three projects will cumulatively represent 160 MW of electrical power and 22 MW of energy storage. For these projects, completion is expected in the last quarter of Fiscal 2025 through the first half of Fiscal 2026.
Current wording
Between January and early May 2024, we received FNTPs for three state-of-the-art solar energy and battery energy storage facilities in Illinois. The three projects will cumulatively represent 160 MW of electrical power and 22 MW of energy storage. Two of these projects were completed in the fourth quarter of Fiscal 2025. Completion of the final project, which experienced certain regulatory delays, is expected to be completed within the next 12 months.
Previous wording
The revenues of the power industry services segment, representing the businesses of GPS and APC, increased by 74.9%, or $90.8 million, to $212.1 million for the three months ended October 31, 2024 compared with revenues of $121.3 million for the three months ended October 31, 2023 as the quarterly construction activities increased for the Midwest Solar and Battery Projects, the Trumbull Energy Center, the 405 MW Midwest Solar Project and the Louisiana LNG Facility. The increase in revenues between quarters was partially offset by decreased construction activities associated with the Guernsey Power Station project, the Shannonbridge Power Project and the ESB FlexGen Peaker Plants, as those projects have concluded. The revenues of this business segment represented approximately 82.5% of consolidated revenues for the quarter ended October 31, 2024 and 74.1% of consolidated revenues for the corresponding prior year quarter.
Current wording
The revenues of the power industry services business increased by 45.4%, or $50.1 million, to $160.4 million for the three months ended April 30, 2025 compared with revenues of $110.3 million for the three months ended April 30, 2024 as the quarterly construction activities increased for the 405 MW Midwest Solar Project, the Louisiana LNG Facility and the Trumbull Energy Center. The increase in revenues between quarters was partially offset by decreased construction activities associated with the Midwest Solar and Battery Projects, the Shannonbridge Power Project and the ESB FlexGen Peaker Plants, as those projects have partially or fully concluded. The revenues of this business segment represented approximately 82.8% of consolidated revenues for the quarter ended April 30, 2025 and 69.9% of consolidated revenues for the corresponding prior year quarter.
Previous wording
The primary drivers for this segment’s revenues for the three months ended October 31, 2023, were the construction of the Shannonbridge Power Project, the Trumbull Energy Center and the ESB FlexGen Peaker Plants.
Current wording
The primary drivers for this segment’s revenues for the three months ended April 30, 2024, were the construction of the Trumbull Energy Center, the Shannonbridge Power Project, and the ESB FlexGen Peaker Plants.
Previous wording
The revenues of our industrial construction services segment, representing the business of TRC, increased by $33.2 million, or 32.7%, to $134.7 million for the nine months ended October 31, 2024 compared to revenues of $101.5 million for the nine months ended October 31, 2023 as the amounts of field services construction activities increased meaningfully between periods, partially offset by decreased supporting vessel fabrication work between periods. For the nine months ended October 31, 2024 and 2023, the revenues of this segment represented 21.0% and 24.8% of consolidated revenues for the corresponding periods.
Current wording
The revenues of industrial construction services decreased by $14.5 million, or 33.2%, to $29.2 million for the three months ended April 30, 2025 compared to revenues of $43.7 million for the three months ended April 30, 2024, as the amounts of field services construction activities and vessel fabrication work decreased between periods. For the three months ended April 30, 2025 and 2024, the revenues of this segment represented 15.1% and 27.7% of consolidated revenues for the corresponding periods.
Previous wording
With the increase in consolidated revenues for the three months ended October 31, 2024 compared with last year’s third quarter ended October 31, 2023, the consolidated cost of revenues also increased between the quarters. These costs were $212.7 million and $144.5 million for the three-month periods ended October 31, 2024 and 2023, respectively, representing an increase of approximately 47.2%.
Current wording
Due primarily to the increase in consolidated revenues for the three months ended April 30, 2025 compared with revenues for the three months ended April 30, 2024, consolidated cost of revenues also increased. These costs were $156.8 million and $139.7 million for the three-month periods ended April 30, 2025 and 2024, respectively.
Previous wording
For the nine-month period ended October 31, 2024, we reported a consolidated gross profit of approximately $93.4 million, which represented a gross profit percentage of approximately 14.6% of corresponding consolidated revenues. For the nine-month period ended October 31, 2023, we reported a consolidated gross profit of approximately $57.2 million, which represented a gross profit percentage of approximately 14.0% of corresponding consolidated revenues. The gross profit percentage increased between periods primarily due to the changing mix of projects and contract types. Additionally, during the nine-month periods ended October 31, 2024 and 2023, gross profit was negatively impacted by losses recorded on the Kilroot Project, which reduced margins by approximately $2.6 million and $11.5 million, respectively. The gross profit percentages of corresponding revenues for the power industry services, industrial construction services and the telecommunications infrastructure services segments were 14.8%, 12.5% and 26.8%, respectively, for the nine months ended October 31, 2024.
Current wording
For the three-month period ended April 30, 2025, we reported a consolidated gross profit of approximately $36.9 million, which represented a gross profit percentage of approximately 19.0% of corresponding consolidated revenues. For the three-month period ended April 30, 2024, we reported a consolidated gross profit of approximately $17.9 million, which represented a gross profit percentage of approximately 11.4% of corresponding consolidated revenues. The gross profit percentage increased between periods primarily due to the changing mix of projects and contract types. In the prior fiscal year, during the three months ended April 30, 2024, gross profit was negatively impacted by losses recorded on an overseas project (see Note 9 to the accompanying condensed consolidated financial statements), which reduced margins by approximately $2.6 million. The gross profit percentages of corresponding revenues for the power industry services, industrial construction services and the telecommunications infrastructure services segments were 20.6%, 10.8% and 18.0%, respectively, for the quarter ended April 30, 2025. The gross profit percentages of corresponding revenues for the power industry services, industrial construction services and the telecommunications infrastructure services segments were 10.2%, 13.3% and 22.9%, respectively, for the quarter ended April 30, 2024.
Previous wording
These costs were $14.0 million and $11.4 million for the three months ended October 31, 2024 and 2023, respectively, and represented 5.4% and 6.9% of corresponding consolidated revenues, respectively.
Current wording
These costs were $12.5 million and $11.4 million for the three months ended April 30, 2025 and 2024, respectively, and represented 6.5% and 7.2% of corresponding consolidated revenues, respectively.
Previous wording
Other income, net, for the three months ended October 31, 2024 was $6.6 million, which reflected income earned during the period on investments in the total amount of approximately $4.8 million, as the weighted average balances of investments are meaningfully higher this year, and earnings related to cash and cash equivalent balances.
Current wording
For the three months ended April 30, 2025 and 2024, the net amounts of other income were $5.4 million and $4.8 million, respectively, which represented an increase of 13.6% between the comparable periods, as the weighted average balances of investments are meaningfully higher this year, and earnings related to cash and cash equivalent balances increased during the three months ended April 30, 2025 as well.
Previous wording
We incurred income tax expense for the nine months ended October 31, 2024 in the amount of approximately $18.5 million, which represents an effective income tax rate of 25.5%. This effective tax rate differs from the statutory federal tax rate of 21% due primarily to the typically unfavorable estimated effects of state income taxes. For the nine months ended October 31, 2023, we reported income tax expense in the amount of approximately $11.6 million, which represented
Current wording
We recorded income tax expense for the three months ended April 30, 2025 in the net amount of approximately $7.2 million primarily due to our reporting pre-tax income for financial reporting purposes in the amount of $29.8 million for the quarter. Our effective income tax rate for the three months ended April 30, 2025 was 24.3%. This effective tax rate differed from the statutory federal tax rate of 21% due primarily to the unfavorable estimated effects of state income taxes.
Previous wording
We incurred income tax expense for the three months ended October 31, 2024 in the amount of approximately $9.0 million, which represents an effective income tax rate of 24.3%. This effective tax rate differs from the statutory federal tax rate of 21% due primarily to the typically unfavorable estimated effects of state income taxes and permanent differences. For the
Current wording
We recorded income tax expense for the three months ended April 30, 2024 in the net amount of approximately $3.4 million. Our effective income tax rate for the three months ended April 30, 2024 was 30.3%. This effective tax rate differs from the statutory federal tax rate of 21% due primarily to an unrecognized tax loss benefit for the prior year quarter and the typically unfavorable estimated effects of state income taxes.
Previous wording
At October 31 and January 31, 2024, our balances of cash and cash equivalents were $175.3 million and $197.0 million, respectively, which represented a decrease of $21.7 million during the current fiscal year.
Current wording
At April 30, 2025 and January 31, 2025, our balances of cash and cash equivalents were $189.3 million and $145.3 million, respectively, which represented an increase of $44.0 million during the current fiscal quarter.
Previous wording
The net amount of cash provided by operating activities for the nine months ended October 31, 2024 was $123.0 million. Our net income for the nine months ended October 31, 2024, adjusted favorably by the net amount of non-cash income and expense items, represented a source of cash in the total amount of $66.6 million. The temporary increase in contract liabilities of $89.6 million represented a source of cash, primarily due to the net effect of the early phase of construction activities on certain GPS projects. The increase in the combined level of accounts payable and accrued expenses in the amount of $43.7 million represented a meaningful source of cash during the period as well. The decrease in contract assets of $3.6 million and the decrease of other assets of $4.5 million represented sources of cash during the period. The increase of accounts receivable in the amount of $85.1 million, which represented a use of cash during the period, was due primarily to the increase in revenues during the period, but also related to the Kilroot Project.
Current wording
The net amount of cash provided by operating activities for the three months ended April 30, 2025 was $35.3 million. Our net income for the three months ended April 30, 2025, adjusted favorably by the net amount of non-cash income and expense items, represented a source of cash in the total amount of $25.9 million. The decrease of accounts receivable in the amount of $69.3 million, which represented a source of cash during the period, was due primarily to the collection of project-related receivables for the power industry services reportable segment. The decrease in contract liabilities of $15.4 million represented a use of cash, primarily due to the net effect of certain power industry services projects nearing completion and the early phase of construction activities at certain projects. The decrease in the combined level of accounts payable and accrued expenses in the amount of $39.6 million represented a use of cash during the period as well. The increase in contract assets of $1.9 million and the increase of other assets of $2.9 million represented uses of cash during the period.
Previous wording
During the nine months ended October 31, 2024, our primary source of cash from investing activities was the net maturities of CDs issued by the Bank, in the amount of $17.5 million. We used $100.8 million, net of maturities, to invest in available-for-sale securities consisting of U.S. Treasury notes and a U.S. corporate debt security. We also used $3.3 million to fund our remaining capital contribution obligation to a solar energy project and $5.2 million for the purchases of property, plant and equipment.
Current wording
During the three months ended April 30, 2025, our primary source of cash from investing activities was the net maturities of CDs issued by the Bank, in the amount of $37.5 million. We used $12.2 million, net of maturities, to invest in available-for-sale securities consisting of U.S. Treasury notes. We also used $0.4 million for purchases of property, plant, and equipment.
Previous wording
For the nine months ended October 31, 2024, we used $17.6 million cash in financing activities, including $13.3 million used for the payment of regular cash dividends and $0.6 million used to repurchase shares of common stock pursuant to our share repurchase program. We also used $3.7 million for share-based award settlements, which represented the net of payments of $10.1 million for withholding taxes reimbursed by shares of common stock and $6.4 million of proceeds from the exercise of stock options during the period. As of October 31, 2024, there were no restrictions with respect to intercompany payments between the holding company, GPS, TRC, APC and SMC.
Current wording
For the three months ended April 30, 2025, we used $18.0 million in cash for financing activities, including $6.8 million used to repurchase shares of common stock pursuant to our share purchase program and $5.1 million used for the payment of regular cash dividends. We also used $6.1 million for share-based award settlements, which represented payments for withholding taxes reimbursed by shares of common stock. As of April 30, 2025, there were no restrictions with respect to intercompany payments between the holding company and all subsidiaries.
Previous wording
At October 31, 2024, a portion of our balance of cash and cash equivalents was invested in a money market fund with most of its net assets invested in cash, U.S. Treasury notes and repurchase agreements secured by U.S. government obligations. The major portion of our domestic operating bank account balances are maintained with the Bank. We do maintain certain Euro-based bank accounts in Ireland and certain pound sterling-based bank accounts in the U.K. in support of the operations of APC. Other investments of our available cash, which included CDs, U.S. Treasury notes and a corporate debt security, totaled approximately $330.9 million as of October 31, 2024, are classified as current assets.
Current wording
At April 30, 2025, a portion of our balance of cash and cash equivalents was invested in a money market fund with most of its net assets invested in cash, U.S. Treasury obligations, other obligations issued by U.S. Government agencies and sponsored enterprises, and repurchase agreements secured by U.S. government obligations. The majority of our domestic operating bank account balances are maintained with the Bank. We do maintain certain Euro-based bank accounts in Ireland and certain pound sterling-based bank accounts in the U.K. in support of our overseas operations.
Previous wording
In order to monitor the actual and necessary levels of liquidity for our business, we focus on net liquidity, or working capital, in addition to our cash balances. During the nine months ended October 31, 2024, our net liquidity increased by $36.1 million to $281.0 million from $244.9 million as of January 31, 2024, due primarily to our net income for the period, partially offset by the payment of cash dividends. As we have no debt service, as our fixed asset acquisitions in a reporting period are typically low, and as our net liquidity includes our investments, our levels of working capital are not subjected to the volatility that affects our levels of cash and cash equivalents.
Current wording
In order to monitor the actual and necessary levels of liquidity for our business, we focus on net liquidity, or working capital, in addition to our cash balances. During the three months ended April 30, 2025, our net liquidity increased by $13.7 million to $315.1 million from $301.4 million as of January 31, 2025, due primarily to our net income, partially offset by the payment of cash dividends, common stock repurchases, and net cash paid for withholding taxes due to stock-based award net settlements. As we have no debt service, as our fixed asset acquisitions in a reporting period are typically low, and as our net liquidity includes our short-term investments and AFS investments, our levels of working capital are not subjected to the volatility that affects our levels of cash and cash equivalents.
Previous wording
We believe that cash on hand, our cash equivalents, cash that will be provided from the maturities of short-term investments and other debt securities and cash generated from our future operations, with or without funds available under our New Credit Agreement, will be adequate to meet our general business needs in the foreseeable future. In general, we maintain significant liquid capital in our consolidated balance sheet to ensure the maintenance of our bonding capacity and to provide parent company performance guarantees for EPC and other construction projects, in addition to supporting our operations with necessary working capital.
Current wording
We believe that cash on hand, our cash equivalents, cash that will be provided from the maturities of short-term investments and other debt securities and cash generated from our future operations, with or without funds available under our Credit Agreement, will be adequate to meet our general business needs in the foreseeable future. In general, we maintain significant liquid capital in our consolidated balance sheet to ensure the maintenance of our bonding capacity and to provide parent company performance guarantees for EPC and other construction projects.
Previous wording
Credit Agreement. We may use the borrowing ability to cover other credit instruments issued by the Bank for our use in the ordinary course of business as defined in the New Credit Agreement. Further, on May 31, 2024, we completed the negotiation of a companion facility, in the amount of $25.0 million, pursuant to which APCL may cause the Bank’s European entity to issue letters of credit on its behalf that will be secured by a blanket parent company guarantee issued by the Company to the Bank.
Current wording
On May 24, 2024, we executed with the Bank the Credit Agreement with an expiration date of May 31, 2027. The Credit Agreement has a base lending commitment amount of $35.0 million and establishes the interest rate for revolving loans at SOFR plus 1.85%. In addition to the base commitment, the credit facility includes an accordion feature that allows for an additional commitment amount of $30.0 million, subject to certain conditions. We may use the borrowing ability to cover other credit instruments issued by the Bank for our use in the ordinary course of business as defined in the Credit Agreement. Further, on May 31, 2024, we entered into a companion facility, in the amount of $25.0 million, pursuant to which an overseas subsidiary of the Company may cause the Bank’s European entity to issue letters of credit on its behalf that are secured by a blanket parent company guarantee issued by the Company to the Bank.
Previous wording
We have pledged the majority of the Company’s assets to secure our financing arrangements. The Bank’s consent is not required for acquisitions, divestitures, cash dividends or significant investments as long as certain conditions are met. The New Credit Agreement requires that the Company comply with certain financial covenants at its fiscal year-end and at each fiscal quarter-end. The New Credit Agreement includes other terms, covenants and events of default that are customary for a credit facility of its size and nature, including a requirement to achieve positive adjusted earnings before interest, taxes, depreciation and amortization, as defined, over each rolling twelve-month measurement period. As of October 31, 2024, we were in compliance with the covenants and other requirements of the New Credit Agreement.
Current wording
We have pledged the majority of the Company’s assets to secure its financing arrangements. The Bank’s consent is not required for acquisitions, divestitures, cash dividends or significant investments as long as certain conditions are met. The Credit Agreement requires that we comply with certain financial covenants at its fiscal year-end and at each fiscal quarter-end. The Credit Agreement includes other terms, covenants and events of default that are customary for a credit facility of its size and nature, including a requirement to achieve positive adjusted earnings before interest, taxes, depreciation and amortization, as defined, over each rolling twelve-month measurement period. As of April 30, 2025, we were in compliance with the covenants and other requirements of the Credit Agreement.
Previous wording
In the normal course of business and for certain major projects, we may be required to obtain surety or performance bonding, to provide parent company guarantees, or to cause the issuance of letters of credit (or some combination thereof) in order to provide performance assurances to clients on behalf of one of our subsidiaries. If our services under a guaranteed project would not be completed or would be determined to have resulted in a material defect or other material deficiency, then we could be responsible for monetary damages or other legal remedies. As is typically required by any surety bond, we would be obligated to reimburse the issuer of any surety bond for any cash payments made thereunder. The commitments under performance bonds generally end concurrently with the expiration of the related contractual obligation. Not all of our projects require bonding.
Current wording
If our services under a guaranteed project would not be completed or would be determined to have resulted in a material defect or other material deficiency, then we could be responsible for monetary damages or other legal remedies. As is typically required by any surety bond, we would be obligated to reimburse the issuer of any surety bond provided on behalf of a subsidiary for any cash payments made thereunder. The commitments under performance bonds generally end concurrently with the expiration of the related contractual obligation.
Previous wording
As of October 31, 2024, the estimated amounts of the Company’s unsatisfied bonded performance obligations, covering all of its subsidiaries, was approximately $0.3 billion. As of October 31, 2024, the outstanding amount of bonds covering other risks, including warranty obligations and contract payment retentions related to completed activities, was $22.9 million.
Current wording
As of April 30, 2025, the estimated amount of our unsatisfied bonded performance obligations, covering all of our subsidiaries, was approximately $0.6 billion. In addition, as of April 30, 2025, the outstanding amount of bonds covering other risks, including warranty obligations and contract payment retentions related to completed activities, was $45.7 million.
Previous wording
In prior years, we made investments in limited liability companies that make equity investments in solar energy projects that are eligible to receive energy tax credits, for which we have received substantially all of the income tax benefits associated with those investments. In Fiscal 2024, we made an investment of approximately $5.1 million cash in a solar tax credit entity. During the nine months ended October 31, 2024, we made the final $3.3 million cash payment committed to this solar fund. It is likely that we will evaluate opportunities to make other solar energy investments of this type in the future.
Current wording
We make investments in limited liability companies that make equity investments in solar energy projects that are eligible to receive energy tax credits, for which we have received substantially all of the income tax benefits associated with those investments. During the three months ended April 30, 2025, we did not make any cash payments to any solar tax credit entities. As of April 30, 2025, we have $11.5 million remaining of cash investment commitments related to a solar fund, which we expect to fulfill in Fiscal 2026. It is likely that we will evaluate opportunities to make other solar energy investments in the future.
Previous wording
However, as EBITDA is not a measure of performance calculated in accordance with U.S. GAAP, we do not believe that this measure should be considered in isolation from, or as a substitute for, the results of our operations presented in accordance with U.S. GAAP that are included in our condensed consolidated financial statements. In addition, our EBITDA does not necessarily represent funds available for discretionary use and is not necessarily a measure of our ability to fund our cash needs.
Current wording
However, as EBITDA is not a measure of performance calculated in accordance with U.S. GAAP, we do not believe that this measure should be considered in isolation from, or as a substitute for, the results of our operations presented in accordance with U.S. GAAP that are included in our consolidated financial statements. In addition, our EBITDA does not necessarily represent funds available for discretionary use and is not necessarily a measure of our ability to fund our cash needs.
Previous wording
The tables following immediately below present the determinations of EBITDA for the three and nine months ended October 31, 2024 and 2023, respectively (amounts in thousands).
Current wording
The following table presents the determinations of EBITDA for the three months ended April 30, 2025 and 2024, respectively (amounts in thousands).
Rearranged current paragraphs (2)
Current report — wording carried from elsewhere
The Company is primarily an engineering and construction firm that conducts operations through its wholly-owned subsidiaries across three distinct reportable business segments. Through our power industry services segment, we provide a full range of engineering, procurement, construction, commissioning, maintenance, project development and technical
Current report — wording carried from elsewhere
In the normal course of business and for certain major projects, we may be required to obtain surety or performance bonding, to provide parent company guarantees, or to cause the issuance of letters of credit (or some combination thereof) in order to provide performance assurances to clients on behalf of one of our subsidiaries.
Rearranged previous paragraphs (5)
Previous report — wording carried elsewhere
Our forward-looking statements, financial position and results of operations, are based on our current expectations and beliefs concerning future developments and their potential effects on us. There can be no assurance that future
Previous report — wording carried elsewhere
Comparison of the Results of Operations for the Nine Months Ended October 31, 2024 and 2023
Previous report — wording carried elsewhere
The following schedule compares our operating results for the nine months ended October 31, 2024 and 2023 (dollars in thousands):
Previous report — wording carried elsewhere
The primary drivers for this segment’s revenues for the nine months ended October 31, 2023, were the construction activities of the Shannonbridge Power Project, the Trumbull Energy Center and the ESB FlexGen Peaker Plants.
Previous report — wording carried elsewhere
Other income, net, for the nine months ended October 31, 2024 was $17.0 million, which reflected income earned during the period on investments in the total amount of approximately $14.0 million, as the weighted average balances of investments are meaningfully higher this year, and earnings related to cash and cash equivalent balances.