Argan, Inc. provides engineering, procurement and construction services to the power generation market with over fifty years of successful operations in the U.S., Britain and Ireland. Among the most profitable EPC service providers, the Company has grown through a combination of market share capture and acquisitions. In the fiscal year ending January 2023, the Company reported $455 million in total revenue, capturing $32.7 million in net income or $2.33 per share. Argan did experience sluggish demand in the year, and revenue shrank by 10% year-over-year. Furthermore, the Company used $30.1 million in cash resource to support operations on unfavorable developments in working capital accounts. Argan has historically been a strong operating cash generator and we expect the working capital situation to reverse in the coming quarters.
The Company has a strong balance sheet that supports changing operating conditions. At the end of January 2023, Argan had $325.4 million in cash and marketable securities on the balance sheet. Furthermore, Argan has no long-term debt. Additional, the Company has $50.0 million in available borrowing capacity. We believe management could move opportunistically is another strategically appealing acquisition should arise. The Company’s most recent deal in 2022, was a tuck-in purchase of Lee Telecom, Inc., a telecommunications infrastructure services provider based in Virginia.
The EPC power market is valued at $730 billion in the U.S. and is forecast to grow at approximately 5% a year through 2032. The pace of growth is slower in Britain, near 2.1% annually through 2029. We expect Argan to remain a strong beneficiary of a resurgence in the U.S. EPC market.
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