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, 2025. This call is being recorded. — Operator Instructions — 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.

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, 2025. On the call today, we have David Watson, Chief Executive Officer; and Josh Baugher, Chief Financial Officer. I will take a moment to read the safe harbor statement. 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 that could cause or contribute to such material differences 1 have been described in this afternoon’s press release and in Argan’s filings with the U.S. Securities and Exchange Commission. These statements are based on information and understandings that are believed to be accurate as of today, and we do not undertake any duty to update such forward-looking statements. Earlier this afternoon, the company issued a press release announcing its fourth quarter and fiscal 2025 financial results and filed its corresponding Form 10-K report with the Securities and Exchange Commission. Okay. With that out of the way, I’ll turn the call over to David Watson, CEO of Argan.

Thanks, Jennifer, and thank you, everybody, for joining today. I’ll start by reviewing some of the highlights of our operations and activities; and Josh Baugher, our CFO, will go over our financial results for the fourth quarter and full year ended January 31, 2025. Then we’ll open up the call for a brief Q&A. Our fourth quarter performance continued the momentum we built throughout fiscal 2025, delivering a strong close to a year characterized by exceptional execution across all of our businesses. The focus and dedication of our team resulted in consolidated revenue growth in fiscal 2025 of 52% to $874 million, full year gross margin of 16.1%, record full year diluted EPS of $6.15 and EBITDA of $113.5 million. Our growth in the year was led by significantly increased revenue from our Power Industry Services segment and strong revenue performance in our Industrial Construction Services business. We exited the fiscal year with a project backlog of approximately $1.4 billion at January 31, 2025, an 80% increase compared to backlog of $757 million at January 31, 2024. 2 In today’s energy demand environment, characterized by increasing pressure on the power grid and an urgent need for additional resources, we are seeing a tremendous pipeline of project opportunities. In fact, during the fourth quarter, we added 1 gigawatt of power projects to our backlog. The 2 new projects include an approximately 700-megawatt combined cycle natural gas-powered project in the U.S. and a 300-megawatt biofuel plant in Ireland. Further, we believe the heightened demand for our capabilities will continue for the next decade and beyond. We’re very optimistic about the demand environment and the runway for our continued growth in the near, mid and long term. Our balance sheet remains strong with $525 million of cash and investments, net liquidity of $301 million and no debt at January 31, 2025. And with the 25% increase our Board approved during the third quarter of fiscal 2025, our annual dividend rate is now $1.50 per common share. With that, now on to the operational review. Slides 4 and 5 present our 3 reportable business segments. Power Industry Services is comprised of our Gemma Power Systems, an Atlantic Projects Company operating units, which focus on the construction of multiple types of power facilities, including efficient gas-fired power plants, solar energy fields, biomass facilities and battery energy storage systems. Power Industry Services revenues increased 65% to $197 million for the current quarter as compared to $119 million for the fourth quarter of fiscal 2024. The segment represented 85% of our fourth quarter revenues and reported pretax book income of $38 million. Industrial Construction Services, which is represented by TRC, had a solid quarter. Although, as we expected, due to the timing of certain projects, revenues decreased to $33 million as compared to revenue of $41 million in the fourth quarter of fiscal 2024. TRC contributed 14% of our fourth quarter consolidated revenues and pretax book in3 come of $4 million. TRC primarily provides solutions for industrial construction projects with a concentration in agriculture, petrochemical, pulp and paper, water and power. As many companies onshore expand their U.S. manufacturing operations, TRC is seeing strong market interest for their capabilities as a project partner. And with their large footprint in the Southeast region of the U.S., they are well situated in a high-growth region for their focused industries. Finally, we have our Telecommunications Infrastructure Services group, our smallest segment, which contributed 1% of our fourth quarter revenues. SMC Infrastructure Solu- tions is our operating brand in this segment, providing outside construction services for the utility and telecommunications sectors as well as inside-the-premises wiring services primarily for federal government locations and military installations requiring high-level security clearance. As we announced recently, we are excited about the appointment of our new CEO at SMC, Brian Orlandi, to help drive growth objectives and increase profitability in this segment. Throughout the past year, the electrification of everything has regularly been cited as the major contributor to rising power demand and the resulting strain on the existing power grid. The increase in data centers, the reshoring of complex manufacturing, the steady adoption of EVs and accompanying charging activity are all driving the need for additional energy resources to provide reliable, high-quality power to meet 24/7 demand. Less widely reported is the fact that a significant portion of the nation’s energy infrastructure is approaching the end of its operational life and that for approximately the last decade, there has been notable underinvestment in building replacement 24/7 power facilities and energy resources. Argan is energy agnostic with the ability to construct all types of power facilities. Our broad capabilities, many years of experience and long-standing customer and subcon4 tract relationships are a competitive advantage in today’s market environment. Judging from the current pipeline, the industry has acknowledged that the most efficient way to ensure stable grids and reliable power generation is through a combination of traditional gas-fired plants as well as renewables, and we build them all. We have a proven track record of success in the construction of complex combined-cycle and simple-cycle natural gas facilities as well as solar, biofuel and other renewable energy resources. The project pipeline is robust, and we believe our favorable reputation as a partner of choice and our record of success, building both natural gas and renewable power generating assets, positions us well to drive continued growth in the current energy environment. We have been a long-time leader in supporting the establishment of diversified power resources. And as this slide illustrates, our current project backlog is approximately 54% natural gas projects and 42% renewable. As I just mentioned a moment ago, the energy industry recognizes that the best pathway to reliable support of an increasingly pressured power grid is through a combination of natural gas and renewable resources. As such, we expect gas-fired and other thermal power plants to remain the core of our business for many years to come, especially as the industry seeks to provide consistent and highquality power sources. As you can see from our backlog of $1.4 billion at January 31, we have added several power plant construction jobs, and we expect to add more over the next 6 months. During fiscal 2025, we invested in our workforce and grew our team in preparation for this increased project load, and we are focused, as always, on delivering excellent on-time execution for our customers as we support the electric economy. Now I’d like to provide some project updates. Gemma is in the later stages of construction on the Trumbull Energy Center project in Lordstown, Ohio, where we’re providing EPC services for a 950-megawatt natural gas-fired power plant. As a reminder, Trumbull is a 5 combined-cycle power station that will assist in fulfilling electricity needs as the region phases out several coal-fired plants. From start to finish, the project includes design, procurement, construction and commissioning. Trumbull is designed to be one of the cleanest and most efficient combined cycle gas turbine projects in the PJM market, and we expect to complete it within the next 12 months. We are also currently executing an EPC services contract for utility-scale solar field in Illinois. The project will provide 405 megawatts of electrical power and will use preexisting transmission and utility infrastructure from a nearby retired coal power plant. Spanning more than 2,000 acres, this is our largest solar project to date. Turning to Slide 10, we highlight one of our newer Gemma projects, an EPC contract with Sandow Lakes Energy Company, or SLEC, for a 1.2 gigawatt ultra-efficient combined-cycle gas-powered plant in Texas. When completed, the facility will be capable of supplying approximately 800,000 homes within the ERCOT grid, and we expect to begin construction this summer. Although the contract has been executed, we are waiting on the final notice to proceed for this project, so the project is not included in our $1.4 billion project backlog as of January 31. At the end of the fourth quarter, APC, our power industry subsidiary operating in Ireland, received full notice to proceed on the Tarbert Next Generation Power Station, a 300megawatt biofuel plant in Ireland for SSE thermal. This is at a project site that we are familiar with and have performed work at in the past. We have recently kicked off this project. There is tremendous demand for the capabilities and proven track record Argan has established as a full-service construction partner for energy facilities. And as it relates to construction of traditional combined-cycle natural gas-powered plants, we are one of only a handful of companies who can execute those complex projects. 6 We’re very excited about the many project opportunities we’re seeing and believe our expertise, the bench strength of our team and our recognized reputation for on-time and on-budget project delivery positions us for continued backlog growth and financial strength. With that, I’ll turn the call over to Josh Baugher to take us through the fourth quarter financials. Go ahead, Josh.

Thanks, David, and good evening, everyone. On Slide 12, we present our consolidated statements of earnings for the fourth quarter and year-end fiscal 2025. Fourth quarter revenues increased 41% to $232.5 million, reflecting particularly strong performance in our Power Industry Services segment and solid growth in our Industrial Construction Services segment as compared to the fourth quarter of fiscal 2024, as David detailed earlier. Project-wise, the increase in revenues primarily related to increased quarterly construction activities for the Midwest solar and battery projects, the Trumbull Energy Center, the 405-megawatt Midwest Solar project and the Louisiana LNG facility. For the 3-month period ended January 31, 2025, Argan reported consolidated gross profit of approximately $47.6 million, which represented a gross margin of approximately 20.5%, and reflected contributions from all 3 reportable business segments. Consolidated gross profit for the comparative quarter last fiscal year was $23.6 million, representing a gross margin of 14.4%. The increased gross profit and the improved gross margin for the recently ended quarter reflects the changing mix of projects, including increased U.S.-based revenues, strong execution and certain positive job closeouts. Selling, general and administrative expenses of $14.9 million for the fourth quarter of fiscal 2025 increased as compared to SG&A of $11.9 million for the comparable prior year 7 period, but these expenses decreased as a percentage of revenues to 6.4% in the fourth quarter of fiscal 2025 as compared to 7.2% in last year’s fourth quarter. Net income for the fourth quarter of the fiscal year was $31.4 million or $2.22 per diluted share compared to $12 million or $0.89 per diluted share for last year’s comparable quarter. EBITDA, earnings before interest, taxes, depreciation and amortization, for the quarter ended January 31, 2025, increased to $39.3 million compared to $17.6 million for the same period of last year. Looking at our full fiscal 2025 performance, revenues increased by 52% to $874.2 million as compared to revenues of $573.3 million in the prior year. The overall revenue growth reflects increased revenues in our Power Industry Services and Industrial Construction Services segments. Our consolidated gross margin of 16.1% for fiscal 2025 increased as compared to gross margin of 14.1% for fiscal 2024, primarily due to the same reasons I previously described for the quarter. The prior year was also meaningfully impacted by a loss on the Kilroot project. Gross margins for our Power Industry Services, our Industrial Construction Services and our Telecommunications Infrastructure Services segments were 16.7%, 13.3% and 23.8%, respectively, for fiscal 2025 as compared to 14.1%, 12.9% and 26.5%, respectively, for fiscal 2024. SG&A expenses increased to $52.8 million for fiscal 2025 as compared to $44.4 million for fiscal 2024, but decreased to 6% of revenues in the fiscal year compared to 7.7% of revenues in the prior fiscal year. Net income for the fiscal year was $85.5 million or $6.15 per diluted share compared to $32.4 million of net income or $2.39 per diluted share for fiscal 2024. 8 EBITDA was $113.5 million for fiscal 2025 compared with EBITDA of $51.3 million for fiscal 2024. With that, I’ll turn the call back to David.

Thanks, Josh. Turning to Slide 13. Our consolidated project backlog was $1.4 billion at January 31, 2025, representing backlog growth of 80% compared to the prior fiscal yearend. As I said earlier in the call, the project pipeline is robust and growing. Our current backlog includes fully committed projects in both the Power Industry Services and Industrial Services segments, including a strong representation of renewable projects. However, with the marketplace demand for natural gas facilities, we anticipate that our backlog will be comprised of a larger portion of traditional gas-powered projects in the coming years. We plan to sustain and continue to nurture our renewable business, but our natural gas projects will be the core of our growth engine for the foreseeable future. Slide 14 highlights certain major projects currently underway or expected to begin in the near term. Earlier, I touched on several projects listed here, such as Trumbull, the 405megawatt utility scale solar project; and 2 of our new contract wins, SLEC and Tarbert. Additionally, during the fourth quarter, we entered into an EPC contract and received the corresponding full notice to proceed with a customer for an approximately 700-megawatt combined-cycle natural gas-fired power plant located in the United States. This large project is already underway and fully reflected in our year-end backlog. Other significant projects include a subcontract to install 5 90-megawatt gas turbines to provide dedicated power to an LNG facility in Louisiana, which we are expected to finish during the first half of this year. We have also completed 2 of the 3 solar plus battery projects in Illinois during fiscal 2025 and expect to finish the third during fiscal 2026. Finally, you’ll see 2 separate 9 water treatment plant projects being performed by TRC. The industry is seeing strong demand, particularly for natural gas projects, and our backlog reflects the scope of our capabilities and the strategic diversification of our project mix to include renewables as well as traditional gas-fired builds. As we move through the current demand environment, we anticipate that natural gas projects will be more heavily represented in our project mix. We further strengthened our balance sheet during the fourth quarter. At January 31, 2025, we had approximately $525 million in cash, cash equivalents and investments, generating meaningful investment yields. Our net liquidity was $301 million, and we had no debt. Stockholders’ equity was $352 million at January 31, 2025. This liquidity bridge demonstrates that our business model ordinarily requires a low level of capital expenditures. Our net liquidity of $301 million at January 31, 2025, has increased $56 million compared to net liquidity at January 31, 2024, while, at the same time, enabling us to return $26 million of capital to our shareholders during the year. Since November 2021, when we began our share buyback program, we have returned a total of approximately $102.5 million to shareholders as we’ve repurchased approximately 2.7 million shares of our common stock or approximately 17% of our shares out- standing at the beginning of the program at an average price of $37.91 per share. Additionally, in September 2024, we increased the company’s quarterly dividend by 25% from $0.30 to $0.375 per share, reflecting the strength of our business and increasing our annual run rate to $1.50 per share. This increase comes just a year after we raised our quarterly dividend to $0.30 per share in September of 2023. Together, these 2 increases represent an aggregate 50% increase in our annual dividend run rate in less than 2 years. 10 Our company is dedicated to driving long-term value creation for shareholders. Our pipeline is stronger than it has ever been, and we remain focused on delivering long-term value to shareholders. Since 2008, we have increased our tangible book value and cumulative dividends per share to record levels. We are in the midst of an extraordinary time in the power industry. The aging power infrastructure and decade-long underinvestment in power facilities has brought us to an inflection point where hundreds of facilities, both gas-powered and renewable, need to be built now. Argan is one of only a few companies with the capabilities to construct both the complex combined- and simple-cycle natural gas plants and the renewable energy resources that are necessary to reliably and affordably power the electric economy. With the pipeline of opportunities we are seeing, we are very optimistic about our growth prospects for the next several years. To close, we remain focused on our long-term growth strategy, leverage our core competencies to capitalize on existing and emerging market opportunities, maintain disciplined risk management with the goal of improving our project management effectiveness and minimizing costly project overruns, strengthen our position as a partner of choice in the construction of power generation facilities that power the electric economy and maintain grid reliability, and last, but not least, drive organic growth while also being alert for acquisition opportunities that make sense for our business through thoughtful capital allocation. We are energized by the strong pipeline of projects ahead as our industry prepares to establish the dependable energy resources necessary to power the reshoring of complex manufacturing operations, the growing number of data centers and increased EV charging among other demands. It’s important to note that the current build-out of power facilities is in its early stages 11 and that the combined-cycle projects we take on typically have a duration of 3 to 4 years. With the volume of projects we’re seeing coming to market, we believe our runway for continued growth is substantial. We are focused on leveraging our capabilities, financial flexibility and long-standing customer and industry relationships to drive continued growth as we pursue new opportunities to build the energy infrastructure needed today, tomorrow and beyond. I’d like to thank our employees for their dedication to executing each job on time and on budget and to thank our shareholders for their continued support. And before we open it up for questions, I wanted to mention that we’ll be holding an Investor Day in about a week, on Tuesday, April 8, 2025. We’re holding the event at the New York Stock Exchange, and we’d love for you to join us. The day will kick off at 8:30 a.m. and will be an opportunity for you to learn more about Argan and meet the management teams of some of our operating subsidiaries. I hope we’ll see many of you there. With that, operator, let’s open it up for questions.

— Operator Instructions — And the first question today is coming from Chris Moore from CJS Securities.

Wow, congrats, guys. That’s a great quarter, and outlook just keeps getting better. Could you maybe break down the 20.5% gross margin a bit further? I know Josh went into it a little bit, but anything else? It sounds like there’s some job closeouts in there. I don’t know if you’re close enough on Trumbull to be getting anything from there. Just anything that could help me better understand that such a big number? 12

Chris, great question on the margins. I knew that this would kind of jump out to you and other folks. And it really comes down to the fundamentals that we put in place here at Argan: strong execution across all the businesses; higher margins are reflecting the shift in project mix, part of which includes more U.S.-based and power revenues for the quarter versus in the past; we were able to avoid certain risk and related costs and close out a number of jobs in our Power and Industrial segments positively. I mean keep in mind, the prior year’s fourth quarter had some margin degradation from the Kilroot project. We may not see margins reflecting this quarter’s levels often, where a lot of things went right all at the same time, but we would expect our consolidated gross margin in general to benefit with the expected increase of gas projects, which are, frankly, higher risk/higher reward type jobs. And also along those lines, Chris, our project backlog, if you might recall, earlier in the prior year, had more T&M versus fixed price, and now we have a larger portion of fixed price contracts today. And also, I’ve noted in the past, we are generally in a good market, which allows us to be selective and focus on jobs that are best for our organization.

Got it. Yes, that’s where I was going next. It sounds like given the number of new projects out there, the relatively few number of firms capable of doing them, I would guess, just in general, the level of margin would go up a little bit just from that as well. The 1.2 gigawatt project, what exactly has to happen, David, to get that into backlog?

Yes. So getting the full notice to proceed, we feel very confident that, that project is going to start sometime this summer, and that’s what we, frankly, put in our press release. So once we get released on that job, we’ll put the whole contract into project backlog. So 13 it’s not reflected in our current backlog, which is $1.4 billion.

Right. What about on the interconnect side? Any reason to think the new administration can have a positive impact there? Any other positive drivers that give you a little more comfort that the interconnect piece of this equation is getting better?

Yes. Honestly, I think there’s been a fair amount of progress over the last year or so by the grid operators themselves. I think they’ve been able to get through some of those bottlenecks. There’s still some that are there, and it’s always a constant challenge for the industry, but we are seeing a little bit greater progress for getting jobs approved. Frankly, Chris, though, I think the larger headwind is more related to kind of getting your turbines, getting the long lead supply chain, which should, over time, abate given that the manufacturers are in overdrive trying to increase their capacity. I think the other thing to keep in mind in general is, to the extent there’s general deregulation with the current administration, that might be able to streamline projects getting approved and getting through all the various things that they have to do to be able to break ground.

Got it. Perfect. Maybe just last one for me. I’m just trying to get a sense of the pace on this 405-megawatt solar project. So you’re talking about completing that sometime in calendar ’26?

Yes. I mean that is a massive 2,000-acre project that we are executing really well, similar to all of our other projects, which is reflective in our gross profit margin.

14 Got it. Are you at kind of a peak run rate at this point in time? Or is that still ramping?

I mean keep in mind, renewables aren’t as – their run rates don’t get – they don’t peak as much as gas jobs do. They’re a little bit flatter in nature. But yes, it is – we’re in the midst of things there.

Your next question is coming from Rob Brown from Lake Street Capital.

David, congratulations on a strong quarter.

Thanks, Rob.

On the project pipeline, I know you talked a lot about it, but can you give us a sense of how many projects are sort of in that pipeline and maybe the regions that are active and maybe sort of a sense of how those – you see those kind of flowing in over the next 18 months?

Yes. I mean the pipeline is largely U.S.-based, largely. And when I speak to the pipeline, I’m referring to the pipeline over the next 6 months, but also the pipeline in the years down the road as well, given that we are, again, as I said earlier in the call, in the early innings of this build-out. No surprise, Texas is a meaningful area for us, but also throughout the United States as it relates to we mentioned that we plan to be adding to our project backlog over the next 6 months from where we are as of 1/31, and that’s – we’re pretty excited about that. And that’s obviously just going to drive our opportunity for more 15 revenues over the next 4 years.

Got it. Okay. Great. And in terms of the customers that you’re pursuing, has that changed over time? Or is that still the independent power producers and kind of the same set of people that you know? Or are there new kind of potential customers like directly to data center operators coming into the mix?

Great question. I mean we’re talking to all potential customers, to be clear. Have we historically worked primarily with independent power producers, that is historically accurate. And so at the end of the day, though, we are looking to build the right jobs in the right place with the right contract with the right customer, and that includes everybody. But currently, it’s primarily been with IPPs.

Okay. Great. And then lastly, on the industrial business, that was down a little bit yearover-year on project timing. How do you see the trend line there playing out over the next year? Is that sort of picking up? Or are there sort of stability there at this point?

Yes. No, I’m glad you asked that question because it did have a little bit of a drop in its backlog as of 1/31. But we’re seeing really strong demand for TRC. And frankly, subsequent to year-end, we’ve added over $40 million in new contracts related to water treatment plant and some data center activity. So we believe TRC will grow its revenue kind of come middle of the year, later in the year and continue to grow like it’s been growing over the last several years. I mean, in general, kind of looking forward, all these additions we’ve made to project 16 backlog in the power space, it takes time for those revenues to start generating in earnest. So from a revenue cadence standpoint, we might expect a small decrease in our overall revenues for the upcoming quarter here before increasing throughout the year for the overall organization. Again, we are in a significant growth phase and looking forward to it.

This does conclude today’s Q&A session. I would now like to turn the floor back to David Watson for closing remarks.

Thank you all for participating in today’s call, our first in our new offices here in Arlington, Virginia. As a reminder, please join us for our first Investor Day in New York on April 8, and you’re always welcome to come visit us here in Virginia. We look forward to speaking with you again when we report our first quarter fiscal 2026 results. Have a great evening.

Thank you. This does conclude today’s conference call. You may disconnect your phone lines at this time, and have a wonderful day. Thank you once again for your participation. Copyright © 2025, S&P Global Market Intelligence. All rights reserved 17