Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Oct. 31, 2020 | Dec. 07, 2020 | |
Document And Entity Information | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Oct. 31, 2020 | |
Document Transition Report | false | |
Entity File Number | 001-31756 | |
Entity Registrant Name | ARGAN INC | |
Entity Central Index Key | 0000100591 | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 13-1947195 | |
Entity Address, Address Line One | One Church Street, Suite 201 | |
Entity Address, City or Town | Rockville | |
Entity Address, State or Province | MD | |
Entity Address, Postal Zip Code | 20850 | |
City Area Code | 301 | |
Local Phone Number | 315-0027 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --01-31 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Title of 12(b) Security | Common Stock, $.15 par value | |
Trading Symbol | AGX | |
Security Exchange Name | NYSE | |
Entity Common Stock, Shares Outstanding | 15,689,969 | |
Document Fiscal Year Focus | 2021 | |
Document Fiscal Period Focus | Q3 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Oct. 31, 2020 | Oct. 31, 2019 | Oct. 31, 2020 | Oct. 31, 2019 | |
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS | ||||
REVENUES | $ 127,331 | $ 58,406 | $ 274,971 | $ 171,009 |
Cost of revenues | 106,988 | 52,414 | 234,989 | 183,078 |
GROSS PROFIT (LOSS) (Note 2) | 20,343 | 5,992 | 39,982 | (12,069) |
Selling, general and administrative expenses | 9,398 | 12,135 | 28,827 | 31,761 |
Impairment loss | 2,072 | |||
INCOME (LOSS) FROM OPERATIONS | 10,945 | (6,143) | 11,155 | (45,902) |
Other income, net | 175 | 3,578 | 1,714 | 7,472 |
INCOME (LOSS) BEFORE INCOME TAXES | 11,120 | (2,565) | 12,869 | (38,430) |
Income tax (expense) benefit (Note 10) | (1,666) | (1,996) | 1,391 | 4,936 |
NET INCOME (LOSS) | 9,454 | (4,561) | 14,260 | (33,494) |
Net income (loss) attributable to non-controlling interests | 2,294 | (40) | 2,007 | |
NET INCOME (LOSS) ATTRIBUTABLE TO THE STOCKHOLDERS OF ARGAN, INC. | 9,454 | (6,855) | 14,300 | (35,501) |
Foreign currency translation adjustments | (321) | 235 | (650) | (825) |
COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO THE STOCKHOLDERS OF ARGAN, INC. | $ 9,133 | $ (6,620) | $ 13,650 | $ (36,326) |
NET INCOME (LOSS) PER SHARE ATTRIBUTABLE TO THE STOCKHOLDERS OF ARGAN, INC. (Note 11) | ||||
Basic (in Dollars per share) | $ 0.60 | $ (0.44) | $ 0.91 | $ (2.27) |
Diluted (in Dollars per share) | $ 0.60 | $ (0.44) | $ 0.91 | $ (2.27) |
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING | ||||
Basic (in shares) | 15,680 | 15,633 | 15,659 | 15,617 |
Diluted (in shares) | 15,833 | 15,633 | 15,795 | 15,617 |
CASH DIVIDENDS PER SHARE (Note 12) | $ 0.25 | $ 0.25 | $ 1.75 | $ 0.75 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Oct. 31, 2020 | Jan. 31, 2020 |
CURRENT ASSETS | ||
Cash and cash equivalents | $ 353,213 | $ 167,363 |
Short-term investments | 90,017 | 160,499 |
Accounts receivable, net | 30,607 | 37,192 |
Contract assets | 27,223 | 33,379 |
Other current assets (Note 10) | 37,760 | 23,322 |
TOTAL CURRENT ASSETS | 538,820 | 421,755 |
Property, plant and equipment, net | 20,966 | 22,539 |
Goodwill | 27,943 | 27,943 |
Other purchased intangible assets, net | 4,324 | 5,001 |
Deferred taxes | 7,894 | |
Right-of-use and other assets | 3,447 | 2,408 |
TOTAL ASSETS | 595,500 | 487,540 |
LIABILITIES AND EQUITY CURRENT LIABILITIES | ||
Accounts payable | 48,836 | 35,442 |
Accrued expenses (Note 10) | 51,650 | 35,907 |
Contract liabilities | 160,544 | 72,685 |
TOTAL CURRENT LIABILITIES | 261,030 | 144,034 |
Deferred taxes | 472 | |
Other noncurrent liabilities | 3,334 | 2,476 |
TOTAL LIABILITIES | 264,836 | 146,510 |
COMMITMENTS AND CONTINGENCIES (Notes 7 and 8) | ||
STOCKHOLDERS' EQUITY | ||
Preferred stock, par value $0.10 per share - 500,000 shares authorized; no shares issued and outstanding | ||
Common stock, par value $0.15 per share - 30,000,000 shares authorized; 15,693,202 and 15,638,202 shares issued at October 31 and January 31, 2020, respectively; 15,689,969 and 15,634,969 shares outstanding at October 31 and January 31, 2020, respectively | 2,354 | 2,346 |
Additional paid-in capital | 152,149 | 148,713 |
Retained earnings | 176,186 | 189,306 |
Accumulated other comprehensive loss | (1,766) | (1,116) |
TOTAL STOCKHOLDERS' EQUITY | 328,923 | 339,249 |
Non-controlling interests | 1,741 | 1,781 |
TOTAL EQUITY | 330,664 | 341,030 |
TOTAL LIABILITIES AND EQUITY | $ 595,500 | $ 487,540 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Oct. 31, 2020 | Jan. 31, 2020 |
CONDENSED CONSOLIDATED BALANCE SHEETS | ||
Preferred stock, par value | $ 0.10 | $ 0.10 |
Preferred stock, shares authorized | 500,000 | 500,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value | $ 0.15 | $ 0.15 |
Common stock, shares authorized | 30,000,000 | 30,000,000 |
Common stock, shares issued | 15,693,202 | 15,638,202 |
Common stock, shares outstanding | 15,689,969 | 15,634,969 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) $ in Thousands | Common Stock | Additional Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive Loss | Non-controlling Interests | Total |
Balances at Jan. 31, 2019 | $ 2,337 | $ 144,961 | $ 247,616 | $ (346) | $ (196) | $ 394,372 |
Balances (in shares) at Jan. 31, 2019 | 15,573,869 | |||||
Net income (loss) | (35,501) | 2,007 | (33,494) | |||
Foreign currency translation loss | (825) | (825) | ||||
Stock compensation expense | 1,512 | 1,512 | ||||
Stock option exercises | $ 9 | 1,558 | $ 1,567 | |||
Stock option exercises (in shares) | 59,433 | 59,000 | ||||
Cash dividends | (11,714) | $ (11,714) | ||||
Balances at Oct. 31, 2019 | $ 2,346 | 148,031 | 200,401 | (1,171) | 1,811 | 351,418 |
Balances (in shares) at Oct. 31, 2019 | 15,633,302 | |||||
Balances at Jul. 31, 2019 | $ 2,346 | 147,445 | 211,167 | (1,406) | (483) | 359,069 |
Balances (in shares) at Jul. 31, 2019 | 15,633,302 | |||||
Net income (loss) | (6,855) | 2,294 | (4,561) | |||
Foreign currency translation loss | 235 | 235 | ||||
Stock compensation expense | 586 | 586 | ||||
Cash dividends | (3,911) | (3,911) | ||||
Balances at Oct. 31, 2019 | $ 2,346 | 148,031 | 200,401 | (1,171) | 1,811 | 351,418 |
Balances (in shares) at Oct. 31, 2019 | 15,633,302 | |||||
Balances at Jan. 31, 2020 | $ 2,346 | 148,713 | 189,306 | (1,116) | 1,781 | 341,030 |
Balances (in shares) at Jan. 31, 2020 | 15,634,969 | |||||
Net income (loss) | 14,300 | (40) | 14,260 | |||
Foreign currency translation loss | (650) | (650) | ||||
Stock compensation expense | 2,199 | 2,199 | ||||
Stock option exercises | $ 8 | 1,237 | $ 1,245 | |||
Stock option exercises (in shares) | 55,000 | 55,000 | ||||
Cash dividends | (27,420) | $ (27,420) | ||||
Balances at Oct. 31, 2020 | $ 2,354 | 152,149 | 176,186 | (1,766) | 1,741 | 330,664 |
Balances (in shares) at Oct. 31, 2020 | 15,689,969 | |||||
Balances at Jul. 31, 2020 | $ 2,351 | 150,847 | 170,653 | (1,445) | 1,741 | 324,147 |
Balances (in shares) at Jul. 31, 2020 | 15,669,969 | |||||
Net income (loss) | 9,454 | 9,454 | ||||
Foreign currency translation loss | (321) | (321) | ||||
Stock compensation expense | 786 | 786 | ||||
Stock option exercises | $ 3 | 516 | 519 | |||
Stock option exercises (in shares) | 20,000 | |||||
Cash dividends | (3,921) | (3,921) | ||||
Balances at Oct. 31, 2020 | $ 2,354 | $ 152,149 | $ 176,186 | $ (1,766) | $ 1,741 | $ 330,664 |
Balances (in shares) at Oct. 31, 2020 | 15,689,969 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Oct. 31, 2020 | Oct. 31, 2019 | Oct. 31, 2020 | Oct. 31, 2019 | |
CASH FLOWS FROM OPERATING ACTIVITIES | ||||
Net income (loss) | $ 9,454 | $ (4,561) | $ 14,260 | $ (33,494) |
Adjustments to reconcile net income (loss) to net cash provided by operating activities | ||||
Deferred income tax expense (benefit) | 8,366 | (4,521) | ||
Depreciation | 940 | 899 | 2,798 | 2,610 |
Stock compensation expense | 800 | 600 | 2,199 | 1,512 |
Lease expense | 500 | 100 | 1,318 | 637 |
Amortization of purchased intangible assets | 226 | 272 | 677 | 864 |
Changes in accrued interest on short-term investments | 482 | 1,106 | ||
Impairment loss | 2,072 | |||
Other | 111 | 60 | ||
Changes in operating assets and liabilities | ||||
Accounts receivable | 6,585 | 1,274 | ||
Contract assets | 6,156 | 7,992 | ||
Other assets | (15,976) | (1,760) | ||
Accounts payable and accrued expenses | 27,725 | (12,523) | ||
Contract liabilities | 87,859 | 50,072 | ||
Net cash provided by operating activities | 142,560 | 15,901 | ||
CASH FLOWS FROM INVESTING ACTIVITIES | ||||
Maturities of short-term investments | 170,000 | 164,000 | ||
Purchases of short-term investments | (100,000) | (75,000) | ||
Purchases of property, plant and equipment | (1,412) | (6,308) | ||
Net cash provided by investing activities | 68,588 | 82,692 | ||
CASH FLOWS FROM FINANCING ACTIVITIES | ||||
Payments of cash dividends | (27,420) | (11,714) | ||
Proceeds from the exercise of stock options | 1,245 | 1,567 | ||
Net cash used in financing activities | (26,175) | (10,147) | ||
EFFECTS OF EXCHANGE RATE CHANGES ON CASH | 877 | (282) | ||
NET INCREASE IN CASH AND CASH EQUIVALENTS | 185,850 | 88,164 | ||
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD | 167,363 | 164,318 | ||
CASH AND CASH EQUIVALENTS, END OF PERIOD | $ 353,213 | $ 252,482 | $ 353,213 | $ 252,482 |
DESCRIPTION OF THE BUSINESS AND
DESCRIPTION OF THE BUSINESS AND BASIS OF PRESENTATION | 9 Months Ended |
Oct. 31, 2020 | |
DESCRIPTION OF THE BUSINESS AND BASIS OF PRESENTATION | |
DESCRIPTION OF THE BUSINESS AND BASIS OF PRESENTATION | NOTE 1 – DESCRIPTION OF THE BUSINESS AND BASIS OF PRESENTATION Description of the Business Argan, Inc. (“Argan”) conducts operations through its wholly-owned subsidiaries, Gemma Power Systems, LLC and affiliates (“GPS”); The Roberts Company, Inc. (“TRC”); Atlantic Projects Company Limited and affiliates (“APC”) and Southern Maryland Cable, Inc. (“SMC”). Argan and these consolidated subsidiaries are hereinafter collectively referred to as the “Company.” Through GPS and APC, the Company provides a full range of engineering, procurement, construction, commissioning, operations management, maintenance, project development, technical and other consulting services to the power generation market, including the renewable energy sector. The wide range of customers includes independent power producers, public utilities, power plant equipment suppliers and global energy plant construction firms with projects located in the continental United States (the “US”), the Republic of Ireland (“Ireland”) and the United Kingdom (the “UK”). Including consolidated variable interest entities (“VIEs”), GPS and APC represent the Company’s power industry services reportable segment. Through TRC, the industrial fabrication and field services reportable segment provides on-site services that support maintenance turnarounds, shutdowns and emergency mobilizations for industrial plants primarily located in the southeast region of the US and that are based on its expertise in producing, delivering and installing fabricated metal 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 US. Basis of Presentation and Significant Accounting Policies The condensed consolidated financial statements include the accounts of Argan, its wholly-owned subsidiaries and its financially controlled VIEs. All significant inter-company balances and transactions have been eliminated in consolidation. In Note 14, the Company has provided certain financial information relating to the operating results and assets of its reportable segments based on the manner in which management disaggregates the Company’s financial reporting for purposes of making internal operating decisions. The Company’s fiscal year ends on January 31 each year. The condensed consolidated balance sheet as of October 31, 2020, the condensed consolidated statements of earnings and stockholders’ equity for the three and nine months ended October 31, 2020 and 2019, and the condensed consolidated statements of cash flows for the nine months ended October 31, 2020 and 2019 are unaudited. The condensed consolidated balance sheet as of January 31, 2020 has been derived from audited financial statements. These condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the US Securities and Exchange Commission (the “SEC”). Certain information and note disclosures normally included in annual financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”) have been condensed or omitted pursuant to those rules and regulations, although the Company believes that the disclosures made are adequate to make the information not misleading. The accompanying condensed consolidated financial statements and notes should be read in conjunction with the consolidated financial statements, the notes thereto, and the independent registered public accounting firm’s report thereon, that are included in the Company’s Annual Report on Form 10-K for the fiscal year ended January 31, 2020 (“Fiscal 2020”). In the opinion of management, the accompanying condensed consolidated financial statements contain all adjustments, which are of a normal and recurring nature, considered necessary to present fairly the financial position of the Company as of October 31, 2020, and its earnings and cash flows for the interim periods presented. The results of operations for any interim period are not necessarily indicative of the results of operations for any other interim period or for a full fiscal year. Accounting Policies In December 2019, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) 2019-12, Simplifying the Accounting for Income Taxes In 2016, the FASB issued ASU 2016-13, Measurement of Credit Losses on Financial Instruments There are no other recently issued accounting pronouncements that have not yet been adopted that the Company considers material to its condensed consolidated financial statements. The carrying value amounts presented in the condensed consolidated balance sheets for the Company’s current assets, which primarily include cash and cash equivalents, short-term investments, accounts receivable and contract assets, and its current liabilities are reasonable estimates of their fair values due to the short-term nature of these items. Variable Interest Entity In January 2018, the Company was deemed to be the primary beneficiary of a VIE that is performing the project development activities related to the planned construction of a new natural gas-fired power plant. Consideration for the Company’s engineering and financial support includes the right to build the power plant pursuant to a turnkey engineering, procurement and construction (“EPC”) services contract that has been negotiated and announced. The account balances of the VIE are included in the condensed consolidated financial statements, including development costs incurred by the VIE during the three and nine-month periods ended October 31, 2020 and 2019. The total amounts of the project development costs included in the balances for property, plant and equipment as of October 31 and January 31, 2020 were $7.4 million and $6.9 million, respectively. Recovery of the Company's investment in this project will most likely depend on the successful completion of the project development efforts, including the arrangement of financing for the construction and operation of the corresponding power plant. |
REVENUES FROM CONTRACT WITH CUS
REVENUES FROM CONTRACT WITH CUSTOMERS | 9 Months Ended |
Oct. 31, 2020 | |
REVENUES FROM CONTRACT WITH CUSTOMERS | |
REVENUES FROM CONTRACT WITH CUSTOMERS | NOTE 2 – REVENUES FROM CONTRACTS WITH CUSTOMERS The Company’s recognition of revenues under contracts with customers is based on a single comprehensive five-step model that requires reporting entities to: 1. Identify the contract, 2. Identify the performance obligations of the contract, 3. Determine the transaction price of the contract, 4. Allocate the transaction price to the performance obligations, and 5. Recognize revenue. Major provisions of the standard cover the determination of which goods and services are distinct and represent separate performance obligations, the evaluation of whether revenues should be recognized at a point in time or over time, and the appropriate treatment for variable consideration. The Company’s revenues are recognized primarily under various types of long-term construction contracts, including those for which revenues are based on either a fixed-price or a time-and-materials basis, and are primarily recognized over time as performance obligations are satisfied due to the continuous transfer of control to the project owner or other customer. Revenues from fixed-price contracts, including a portion of estimated gross profit, are recognized as services are provided, based on costs incurred and estimated total contract costs using the percentage-of-completion method. If, at any time, the estimate of contract profitability indicates an anticipated loss on a contract, the Company will recognize the total loss in the reporting period that it is identified and an amount is estimable. Revenues from time-and-materials contracts are recognized when the related services are provided to the customer. Almost all of the Company’s fixed-price contracts are considered to have a single performance obligation. Although multiple promises to transfer individual goods or services may exist, they are not typically distinct within the context of such contracts because contract promises included therein are interrelated or the contracts require the Company to perform critical integration so that the customer receives a completed project. The Company’s accounting for its assurance-type warranties provided under contracts with customers is conducted in accordance with the specific professional guidance established to cover such arrangements. The transaction price for a contract represents the accounting value of the contract awarded to the Company that is used to determine the amount of revenues recognized as of the balance sheet date. It may reflect amounts of variable consideration, which could be either increases or decreases to the transaction price. These adjustments can be made from time-to-time during the period of contract performance as circumstances evolve related to such items as changes in the scope and price of contracts, claims, incentives and liquidated damages. Contract assets generally include amounts that represent the rights to receive payment for goods or services that have been transferred to the project owner, with the rights conditional upon something other than the passage of time. Contract liabilities generally include the amounts that reflect obligations to provide goods or services for which payment has been received. The balances of accounts receivable exclude billed amounts which, pursuant to the terms of the applicable contract, are not paid by project owners until a defined phase of a contract or project has been completed and accepted. These retained amounts are reflected in contract assets or contract liabilities depending on the net contract position of the particular contract. Retention amounts and the length of retention periods may vary. Retention amounts related to active contracts are considered current regardless of the term of the applicable contract; such amounts are generally collected by the completion of the applicable contract. The total of amounts retained by project owners under construction contracts at October 31 and January 31, 2020 were $32.5 million and $20.0 million, respectively. Variable Consideration Amounts for contract variations for which the Company has project-owner directive for additional work or other scope change, but not for the price associated with the corresponding additional effort, are included in the transaction price when it is considered probable that the applicable costs will be recovered through a modification to the contract price. The effects of any revision to a transaction price can be determined at any time and they could be material. The Company may include in the corresponding transaction price a portion of the amount claimed in a dispute that it expects to receive from a project owner. Once a settlement of the dispute has been reached with the project owner, the transaction price may be revised again to reflect the final resolution. The aggregate amount of such contract variations included in the transaction prices that were used to determine project-to-date revenues at October 31, 2020 and January 31, 2020 were $8.0 million and $21.2 million, respectively. Variations related to the Company’s contracts typically represent modifications to the existing contracts and performance obligations, and do not represent new performance obligations. Actual costs related to any changes in the scope of the corresponding contract are expensed as they are incurred. Changes to total estimated contract costs and losses, if any, are reflected in operating results for the period in which they are determined. The Company’s long-term contracts typically have schedule dates and other performance objectives that if not achieved could subject the Company to liquidated damages. At the outset of each of the Company’s contracts, the potential amounts of liquidated damages typically are not constrained, or subtracted, from the transaction price as the Company believes that it has included activities in its contract plan, and the associated costs, that will be effective in preventing such damages. Of course, circumstances may change as the Company executes the corresponding contract. The transaction price is reduced by an applicable amount when the Company no longer considers it probable that a future reversal of revenues will not occur when the matter is resolved. The Company considers potential liquidated damages, the costs of other related items and potential mitigating factors in determining the adequacy of its regularly updated estimates of the amounts of gross profit expected to be earned on active projects. The Company records adjustments to revenues and profits on contracts, including those associated with contract variations and estimated cost changes, using a cumulative catch-up method. Under this method, the impact of an adjustment to the amount of revenues recognized to date is recorded in the period that the adjustment is identified. Estimated variable consideration amounts are determined by the Company based primarily on the single most likely amount in the range of possible consideration amounts. Revenues and profits in future periods of contract performance are recognized using the adjusted amounts of transaction price and estimated contract costs. Accounting for the Loss Subcontract In its Form 10-K Annual Report for the year ended January 31, 2019 (“Fiscal 2019”), the Company disclosed that APC was completing the mechanical installation of the boiler for a biomass-fired power plant under construction in Teesside, England (the “TeesREP Project”) that had encountered significant operational and contractual challenges. The consolidated operating results for the year ended January 31, 2019 reflected unfavorable gross profit adjustments related to this project. The disclosure explained that the construction project was behind the schedule originally established for the job and warned that the TeesREP Project may continue to impact the Company’s consolidated operating results negatively until it reaches completion. Subsequent to the release of the Company’s consolidated financial statements for Fiscal 2019, APC’s estimates of the costs of the unfavorable financial impacts of the difficulties on the TeesREP Project escalated substantially. For the nine-month period ended October 31, 2019, the Company recorded a loss related to this project in the amount of $31.2 million, including $0.3 million recorded in the three months ended October 31, 2019, and reversed profit in the amount of $0.7 million that had been recorded in prior fiscal years. Construction activities on the TeesREP Project were suspended on March 24, 2020 due to the COVID-19 pandemic. At that time, APC had completed approximately 90% of its subcontracted work. As a condition for resuming its efforts on the TeesREP Project, APC entered into an amendment to the subcontract with its customer, effective June 1, 2020, covering the various terms and conditions for completion of the installation of the boiler (“Amendment No. 2”). The agreement represented a global settlement of past commercial differences with both parties making significant concessions, and converted the billing arrangements for the remaining work to a time-and-materials basis. Amendment No. 2 was treated as a modification of the original subcontract as the arrangement continued to represent a single performance obligation to its customer, the delivery of a complete functioning and integrated boiler that was only partially satisfied when the modification to the subcontract occurred. During October 2020, APC and its customer agreed to additional contractual changes that effectively recognized APC’s completion of the single performance obligation and that establishes a time-and-materials contractual arrangement covering all works requested by APC’s customer until completion of the power plant construction. The effects of these changes on the financial results reported for the subcontract were the primary reasons for the reductions to the subcontract loss that were recorded during the three and nine months ended October 31, 2020, in the approximate favorable amounts of $2.8 million and $4.1 million, respectively. Accordingly, the final amount of the TeesREP fixed price subcontract loss was $29.5 million, and the remaining subcontract loss reserve balance was eliminated as of October 31, 2020. At January 31, 2020, the subcontract loss reserve balance was $5.8 million. This balance was included in accrued expenses in the accompanying condensed consolidated balance sheet. Final closeout adjustments may result in future changes in the amount of the subcontract loss recognized as of October 31, 2020; however, APC has included an estimate of these costs in accrued expenses in the accompanying condensed consolidated balance sheet as of October 31, 2020. The total amounts of accounts receivable and contract assets related to the TeesREP Project and included in the condensed consolidated balance sheets were $7.3 million as of October 31, 2020 and $19.2 million as of January 31, 2020. Remaining Unsatisfied Performance Obligations (“RUPO”) The amount of RUPO represents the unrecognized revenue value of active contracts with customers as determined under the revenue recognition rules of US GAAP. Increases to RUPO during a reporting period represent the transaction prices associated with new contracts, as well as additions to the transaction prices of existing contracts. The amounts of such changes may vary significantly each reporting period based on the timing of major new contract awards and the occurrence and assessment of contract variations. At October 31, 2020, the Company had RUPO of $604.7 million. The largest portion of RUPO at any date usually relates to EPC service contracts with typical performance durations of 2 to 3 years. However, the length of certain significant construction projects may exceed three years. The Company estimates that approximately 63% of the RUPO amount at October 31, 2020 will be included in the amount of consolidated revenues that will be recognized over the next twelve months. Most of the remaining amount of the RUPO amount at October 31, 2020 is expected to be recognized in revenues over the following eighteen months. Revenues for future periods will also include amounts related to customer contracts started or awarded subsequent to October 31, 2020. It is important to note that estimates may be changed in the future and that cancellations, deferrals, scope adjustments may occur related to work included in the amount of RUPO at October 31, 2020. Accordingly, RUPO may be adjusted to reflect project delays and cancellations, revisions to project scope and cost and foreign currency exchange fluctuations, or to revise estimates, as effects become known. Such adjustments may materially reduce future revenues below Company estimates. Disaggregation of Revenues The following table presents consolidated revenues for the three and nine months ended October 31, 2020 and 2019, disaggregated by the geographic area where the corresponding projects were located: Three Months Ended Nine Months Ended October 31, October 31, 2020 2019 2020 2019 United States $ 109,241 $ 39,629 $ 241,616 $ 117,045 United Kingdom 9,759 10,349 22,595 35,631 Republic of Ireland 8,331 8,256 10,760 18,007 Other — 172 — 326 Consolidated Revenues $ 127,331 $ 58,406 $ 274,971 $ 171,009 Each year, the majority of consolidated revenues are recognized pursuant to fixed-price contracts with most of the remaining portions earned pursuant to time-and-material contracts. Consolidated revenues are disaggregated by reportable segment in Note 14 to the condensed consolidated financial statements. |
CASH, CASH EQUIVALENTS AND SHOR
CASH, CASH EQUIVALENTS AND SHORT-TERM INVESTMENTS | 9 Months Ended |
Oct. 31, 2020 | |
CASH, CASH EQUIVALENTS AND SHORT-TERM INVESTMENTS | |
CASH, CASH EQUIVALENTS AND SHORT-TERM INVESTMENTS | NOTE 3 – CASH, CASH EQUIVALENTS AND SHORT-TERM INVESTMENTS At October 31 and January 31, 2020, significant amounts of cash and cash equivalents were invested in mutual funds with net assets invested in high-quality money market instruments. Such investments include US Treasury obligations; obligations of US government agencies, authorities, instrumentalities or sponsored enterprises; and repurchase agreements secured by US government obligations. Due to market conditions, returns on money market instruments are currently minimal. The Company considers all liquid investments with original maturities of three months or less at the time of purchase to be cash equivalents. Short-term investments as of October 31 and January 31, 2020 consisted solely of certificates of deposit purchased from Bank of America (the “Bank”) with weighted average initial maturities of 292 days and 165 days, respectively (the “CDs”). The Company has the intent and ability to hold the CDs until they mature, and they are carried at cost plus accrued interest which approximates fair value. The total carrying value amounts as of October 31 and January 31, 2020 included accrued interest, which was $0.5 million at January 31, 2020. The amount of accrued interest at October 31, 2020 was insignificant. Interest income is recorded when earned and is included in other income. At October 31 and January 31, 2020, the weighted average annual interest rates of the outstanding CDs were 0.2% and 1.8%, respectively. In addition, the Company has a substantial portion of its cash on deposit in the US at the Bank in excess of federally insured limits. Management does not believe that the combined amount of the CD investments and the cash deposited with the Bank represents a material risk. The Company also maintain certain Euro-based bank accounts in Ireland and certain pound sterling-based bank accounts in the UK in support of the operations of APC. |
ACCOUNTS AND NOTES RECEIVABLE
ACCOUNTS AND NOTES RECEIVABLE | 9 Months Ended |
Oct. 31, 2020 | |
ACCOUNTS AND NOTES RECEIVABLE | |
ACCOUNTS AND NOTES RECEIVABLE | NOTE 4 – ACCOUNTS AND NOTES RECEIVABLE The Company generally extends credit to a customer based on an evaluation of the customer’s financial condition without requiring tangible collateral. Exposure to losses on accounts and notes receivable is expected to differ due to the varying financial condition of each customer. The Company monitors its exposure to credit losses and may establish an allowance for a credit loss based on management’s estimate of the loss that is expected to occur over the remaining life of the particular financial asset. At October 31 and January 31, 2020, the amounts of credit losses expected by management were insignificant. The amounts of the provision for credit losses for the three and nine months ended October 31, 2020 and the provision for uncollectible accounts for the three and nine months ended October 31, 2019 were also insignificant. As of October 31, 2020, there were outstanding invoices billed to one former customer and unbilled costs incurred on the related project, with balances included in accounts receivable and contract assets, in the aggregate amount of $24.5 million, for which the recovery time will most likely depend on the resolution of the outstanding legal dispute between the parties (see Note 8). As of October 31, 2020, there were past due notes receivable from project developers in the aggregate amount of $1.7 million, for which full receipt will most likely depend on the successful financing of the related projects. |
PURCHASED INTANGIBLE ASSETS
PURCHASED INTANGIBLE ASSETS | 9 Months Ended |
Oct. 31, 2020 | |
PURCHASED INTANGIBLE ASSETS | |
PURCHASED INTANGIBLE ASSETS | NOTE 5 – PURCHASED INTANGIBLE ASSETS At both October 31, 2020 and January 31, 2020, the goodwill balances related to the acquisitions of GPS and TRC were $18.5 million and $9.5 million, respectively. Primarily due to the significant reduction of the fair value of the business of APC deemed to have occurred as a result of the substantial contract loss discussed in Note 2 above, the Company recorded an impairment loss in the first quarter ended April 30, 2019 in the amount of $2.1 million, which was the remaining balance of goodwill associated with APC. No other changes were made to the balances of goodwill during the nine-month periods ended October 31, 2020 or 2019. Management does not believe that any events or circumstances that have occurred or arisen since January 31, 2020 require an updated assessment of the goodwill balances of either GPS or TRC. The Company’s purchased intangible assets, other than goodwill, consisted of the following elements as of October 31 and January 31, 2020: October 31, 2020 January 31, Estimated Gross Accumulated Net 2020, (net Useful Life Amounts Amortization Amount amounts) Trade names 15 years $ 8,142 $ 4,849 $ 3,293 $ 3,699 Process certifications 7 years 1,897 1,332 565 768 Customer relationships 4-10 years 1,346 880 466 534 Totals $ 11,385 $ 7,061 $ 4,324 $ 5,001 |
FINANCING ARRANGEMENTS
FINANCING ARRANGEMENTS | 9 Months Ended |
Oct. 31, 2020 | |
FINANCING ARRANGEMENTS | |
FINANCING ARRANGEMENTS | NOTE 6 – FINANCING ARRANGEMENTS The Company maintains financing arrangements with the Bank that are described in an Amended and Restated Replacement Credit Agreement (the “Credit Agreement”), dated May 15, 2017. The Credit Agreement provides a revolving loan with a maximum borrowing amount of $50.0 million that is available until May 31, 2021 with interest at the 30-day London Interbank Offered Rate (“LIBOR”) borrowings The Company has pledged the majority of its 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 Bank requires that the Company comply with certain financial covenants at its fiscal year-end and at each of its fiscal quarter-ends. The Credit Agreement also includes other terms, covenants and events of default that are customary for a credit facility of its size and nature. As of October 31 and January 31, 2020, the Company was in compliance with the financial covenants. In support of the current project development activities of the VIE described in Note 1, the Bank issued a letter of credit, outside the scope of the Credit Agreement, in the amount of $3.4 million for which the Company has provided cash collateral. |
COMMITMENTS
COMMITMENTS | 9 Months Ended |
Oct. 31, 2020 | |
COMMITMENTS | |
COMMITMENTS | NOTE 7 – COMMITMENTS Leases The Company determines if a contract is or contains a lease at inception or upon modification of the contract. A contract is or contains a lease if it conveys the right to control the use of an identified asset for a period in exchange for consideration. Control over the use of the identified asset means the lessee has both (a) the right to obtain substantially all of the economic benefits from the use of the asset and (b) the right to direct the use of the asset. The Company does not apply this accounting to those leases with terms of twelve (12) months or less and that do not include options to purchase the underlying assets that the Company is reasonably certain to exercise. The Company’s operating leases primarily cover office space that expire on various dates through May 2024 and certain equipment used by the Company in the performance of its construction services contracts. Other construction equipment is rented, with periods of expected usage less than one year, or owned. Certain leases contain renewal options, which are included in expected lease terms if they are reasonably certain of being exercised by the Company. Other equipment leases are embedded in broader arrangements with subcontractors or construction equipment suppliers. The Company has no finance leases. Operating lease right-of-use assets and associated lease liabilities are recognized in the balance sheet at the lease commencement date based on the present value of future minimum lease payments to be made over the expected lease term. As the implicit rate is not determinable in most of the Company’s leases, management uses the Company’s incremental borrowing rate (LIBOR plus 2.0%) at the commencement date in determining the present value of future payments. The expected lease term includes an option to extend or to terminate the lease when it is reasonably certain that the Company will exercise such option. Lease expense for minimum lease payments is recognized on a straight-line basis over the expected lease term. Operating lease expense amounts for the three months ended October 31, 2020 and 2019 were $0.5 million and $0.1 million, respectively. Operating lease expense amounts for the nine months ended October 31, 2020 and 2019 were $1.3 million and $0.6 million, respectively. Operating lease payments for the three months ended October 31, 2020 and 2019 were $0.3 million and $0.2 million, respectively. Operating lease payments for the nine months ended October 31, 2020 and 2019 were $1.2 million and $0.6 million, respectively. For operating leases as of October 31, 2020, the weighted average lease term is 32 months and the weighted average discount rate is 3.3%. The Company also uses equipment and occupies facilities under short-term rental agreements. Rent expense amounts incurred under operating leases and short-term rental agreements (including portions of the lease expense amounts disclosed above) and included in costs of revenues for the three and nine months ended October 31, 2020 were $2.3 million and $4.2 million, respectively. Rent expense incurred under these types of arrangements and included in costs of revenues for the three and nine months ended October 31, 2019 was $0.9 million and $3.2 million, respectively. Rent expense included in selling, general and administrative expenses for the three and nine months ended October 31, 2020 was $0.2 million and $0.7 million, respectively. Rent expense included in selling, general and administrative expenses for the three and nine months ended October 31, 2019 was $0.1 million and $0.5 million, respectively. The following is a schedule of future minimum lease payments for the operating leases that were recognized in the condensed consolidated balance sheet as of October 31, 2020, including operating leases added during the three and nine months ended October 31, 2020 in the amounts of approximately $0.5 million and $2.3 million, respectively, covering primarily certain construction-site assets required by GPS: Years Ending January 31, Remainder of 2021 $ 505 2022 1,648 2023 856 2024 242 2025 85 Thereafter 20 Total lease payments 3,356 Less interest portion 90 Present value of lease payments 3,266 Less current portion (included in accrued expenses) 2,760 Non-current portion $ 506 The future minimum lease payments presented above include amounts due under a long-term lease covering the primary offices and plant for TRC with the founder and current chief executive officer of TRC at an annual rate of $0.3 million through April 30, 2021. Performance Bonds and Guarantees In the normal course of business and for certain major projects, the Company may be required to obtain surety or performance bonding, to cause the issuance of letters of credit, or to provide parent company guarantees (or some combination thereof) in order to provide performance assurances to clients on behalf of its contractor subsidiaries. As these subsidiaries are wholly-owned, any actual liability is ordinarily reflected in the financial statement account balances determined pursuant to the Company’s accounting for contracts with customers. When sufficient information about claims on guaranteed or bonded projects would be available and monetary damages or other costs or losses would be determined to be probable, the Company would record such losses. Any amounts that may be required to be paid in excess of the estimated costs to complete contracts in progress as of October 31, 2020 are not estimable. On behalf of APC, Argan has provided a parent company performance guarantee to its customer, the EPC services contractor on the TeesREP Project. Earlier this year, and in connection with the negotiation of Amendment No. 2, the Company replaced an outstanding letter of credit in the amount of $7.6 million with a surety bond. As of October 31, 2020, the Company has also provided a financial guarantee, subject to certain terms and conditions, on behalf of GPS to an original equipment manufacturer in the amount of $3.6 million in support of business development efforts. The fair value of this guarantee at October 31, 2020 is considered to be immaterial. Warranties The Company generally provides assurance-type warranties for work performed under its construction contracts. The warranties cover defects in equipment, materials, design or workmanship, and most warranty periods typically run from nine |
LEGAL CONTINGENCIES
LEGAL CONTINGENCIES | 9 Months Ended |
Oct. 31, 2020 | |
LEGAL CONTINGENCIES | |
LEGAL CONTINGENCIES | NOTE 8 – LEGAL CONTINGENCIES In the normal course of business, the Company may have pending claims and legal proceedings. In the opinion of management, based on information available at this time, there are no current claims and proceedings that could have a material adverse effect on the condensed consolidated financial statements except for the matter described below. In January 2019, GPS filed a lawsuit against Exelon West Medway II, LLC and Exelon Generation Company, LLC (together referred to as “Exelon”) for Exelon’s breach of contract and failure to remedy various conditions which negatively impacted the schedule and the costs associated with the construction by GPS of a gas-fired power plant for Exelon in Massachusetts. As a result, the Company believes that Exelon has received the benefits of the construction efforts of GPS and the corresponding progress made on the project without making payments to GPS for the value received (see Note 4). In March 2019, Exelon provided GPS with a notice intending to terminate the EPC contract under which GPS had been providing services to Exelon. At that time, the construction project was nearly complete and both of the power generation units included in the plant had successfully reached first fire. The completion of various prescribed performance tests and the clearance of punch-list items were the primary tasks necessary to be accomplished by GPS in order to achieve substantial completion of the power plant. Nevertheless, and among other actions, Exelon provided contractual notice requiring GPS to vacate the construction site. Exelon has asserted that GPS failed to fulfill certain obligations under the contract and was in default, withholding payments from GPS on invoices rendered to Exelon in accordance with the terms of the contract between the parties. With vigor, GPS intends to continue to assert its rights under the EPC contract with Exelon, to pursue the collection of amounts owed under the EPC contract and to defend itself against the allegations that GPS did not perform in accordance with the contract. During the nine months ended October 31, 2020, most of the litigation activities of the legal teams has focused on the completion of discovery. The difficulties experienced by the legal teams in completing certain discovery activities, due in part to COVID-19 restrictions, resulted in the court granting extensions of the discovery period which is now closed for both parties. The next phase of the case is pre-trial. The Company expects that a mediation will be scheduled for Spring 2021. If the mediation is not successful in resolving the disputes, then the Company expects that trial will occur during the mid-to-late Summer 2021. |
STOCK-BASED COMPENSATION
STOCK-BASED COMPENSATION | 9 Months Ended |
Oct. 31, 2020 | |
STOCK-BASED COMPENSATION | |
STOCK-BASED COMPENSATION | NOTE 9 – STOCK-BASED COMPENSATION The Company’s board of directors may make awards under the 2011 Stock Plan (the “2011 Plan”) or the 2020 Stock Plan (the “2020 Plan”) to officers, directors and key employees (together, the “Stock Plans”). On June 23, 2020, the Company’s stockholders approved the adoption of the 2020 Plan, and the allocation of 500,000 shares of the Company’s common stock for issuance thereunder, which had been established by the Company’s board of directors earlier in the current year. The 2020 Plan will serve to replace the 2011 Plan; the Company’s authority to make awards pursuant to the 2011 Plan will expire on July 19, 2021. The features of the 2020 Plan are similar to those included in the 2011 Plan. Awards may include nonqualified stock options, incentive stock options, and restricted or unrestricted stock. The specific provisions for each award made pursuant to the terms of the Stock Plans are documented in a written agreement between the Company and the awardee. All stock options awarded under the Stock Plans shall have an exercise price per share at least equal to the common stock’s market value on the date of grant. Stock options shall have terms no longer than ten years. Typically, stock options are awarded with one three Summaries of stock option activity under the Company’s approved stock option plans for the nine months ended October 31, 2020 and 2019, along with corresponding weighted average per share amounts, are presented below (shares in thousands): Exercise Remaining Shares Price Term (years) Fair Value Outstanding, February 1, 2020 1,271 $ 44.83 7.18 $ 11.06 Granted 172 $ 33.81 Exercised (55) $ 22.69 Forfeited (24) $ 55.61 Outstanding, October 31, 2020 1,364 $ 44.14 6.96 $ 10.52 Exercisable, October 31, 2020 865 $ 46.40 5.97 $ 11.76 Exercise Remaining Shares Price Term (years) Fair Value Outstanding, February 1, 2019 1,140 $ 44.01 7.54 $ 11.22 Granted 168 $ 46.67 Exercised (59) $ 26.36 Forfeited (38) $ 46.34 Outstanding, October 31, 2019 1,211 $ 45.18 7.28 $ 11.27 Exercisable, October 31, 2019 753 $ 45.81 6.25 $ 10.22 The changes in the number of non-vested options to purchase shares of common stock for the nine months ended October 31, 2020 and 2019, and the weighted average fair value per share for each number, are presented below (shares in thousands): Shares Fair Value Non-vested, February 1, 2020 448 $ 9.74 Granted 172 $ 5.68 Vested (112) $ 9.81 Forfeitures (9) $ 8.08 Non-vested, October 31, 2020 499 $ 8.35 Shares Fair Value Non-vested, February 1, 2019 375 $ 10.05 Granted 168 $ 10.32 Vested (57) $ 9.28 Forfeitures (28) $ 10.47 Non-vested, October 31, 2019 458 $ 10.22 Pursuant to the terms of the 2011 Plan and as described in the corresponding agreements with the executives, the Company awarded performance-based restricted stock units to two senior executives in April 2020, 2019 and 2018 covering 45,000, 36,000 and 36,000 maximum total numbers of shares of common stock, respectively, plus a number of shares to be determined based on the amount of cash dividends deemed paid on shares earned pursuant to the awards. The release of the stock restrictions depends on the total return performance of the Company’s common stock measured against the performance of a peer-group of common stocks over three-year periods. The fair value amounts for restricted stock units were determined by using the per share market price of the Company’s common stock on the dates of award and the target number of shares for the awards (50% of the maximum number), by assigning equal probabilities to the thirteen possible payout outcomes at the ends of the three-year vesting periods, and by computing the weighted average of the outcome amounts. For each case, the estimated fair value amount was calculated to be 88.5% of the aggregate market value of the target number of shares on the award date. The fair values of stock options and restricted stock units are recorded as stock compensation expense over the vesting periods of the corresponding awards. Expense amounts related to stock awards were $0.8 million and $0.6 million for the three months ended October 31, 2020 and 2019, respectively. Expense amounts related to stock awards were $2.2 million and $1.5 million for the nine months ended October 31, 2020 and 2019, respectively. At October 31, 2020, there was $3.8 million in unrecognized compensation cost related to outstanding stock awards that the Company expects to expense over the next three years. The total intrinsic value amounts of the stock options exercised during the nine months ended October 31, 2020 and 2019 were $1.2 million and $1.4 million, respectively. At October 31, 2020, the aggregate market value amounts of the shares of common stock subject to outstanding and exercisable stock options that were “in-the-money” exceeded the aggregate exercise prices of such options by $4.7 million and $3.3 million, respectively. The Company estimates the weighted average fair value of stock options on the date of award using a Black-Scholes option pricing model, which was developed for use in estimating the fair value of traded options that have no vesting restrictions and are fully transferable. The Company believes that its past stock option exercise activity is sufficient to provide it with a reasonable basis upon which to estimate the expected life of newly awarded stock options. Risk-free interest rates are determined by blending the rates for three The fair value amounts of stock options granted during the nine months ended October 31, 2020 and 2019 were estimated on the corresponding dates of the awards using the Black-Scholes option-pricing model reflecting the following weighted average assumptions: Nine Months Ended October 31, 2020 2019 Dividend yield 3.0 % 2.2 % Expected volatility 30.0 % 33.1 % Risk-free interest rate 0.5 % 2.0 % Expected life (in years) 3.4 3.3 |
INCOME TAXES
INCOME TAXES | 9 Months Ended |
Oct. 31, 2020 | |
INCOME TAXES | |
INCOME TAXES | NOTE 10 – INCOME TAXES Income Tax Expense Reconciliation The Company’s income tax amounts for the nine months ended October 31, 2020 and 2019 differed from corresponding amounts computed by applying the federal corporate income tax rate of 21% to the income (loss) before income taxes for the periods as presented in the table below. Nine Months Ended October 31, 2020 2019 Computed expected income tax (expense) benefit $ (2,702) $ 8,070 Difference resulting from: Net operating loss carryback 4,390 — Foreign tax rate differential (77) (766) Stock options 66 (170) State income taxes, net of federal tax effect (40) 185 Net operating losses deemed unrealizable — (6,280) Bad debt loss — 5,026 Adjustments and other differences (246) (1,129) Income tax benefit $ 1,391 $ 4,936 Foreign income tax expense amounts for the nine months ended October 31, 2020 and 2019 were not material. A valuation allowance in the amount of $6.3 million was established against the deferred tax asset amount created by the net operating loss of APC’s subsidiary in the UK for the nine months ended October 31, 2019. As the subsidiary is expected to report income for the current year, approximately $0.1 of tax benefit was recorded during the nine-month period ended October 31, 2020. Net Operating Loss Carryback In an effort to combat the adverse economic impacts of the COVID-19 crisis, the US Congress passed the Coronavirus, Aid, Relief, and Economic Security Act ( the “CARES Act”) that was signed into law on March 27, 2020. This wide-ranging legislation was an emergency economic stimulus package that includes spending and tax breaks aimed at strengthening the US economy and funding a nationwide effort to curtail the effects of the outbreak of COVID-19. The CARES Act has provided many opportunities for taxpayers to evaluate their 2018 and 2019 income tax returns to identify potential tax refunds. One such area is the utilization of net operating losses (“NOLs”). The tax changes of the CARES Act remove the limitations on the future utilization of certain NOLs and re-establish a carryback period for certain losses to five years. The NOLs eligible for carryback under the CARES Act include the Company’s domestic NOL for the year ended January 31, 2020, which was approximately $39.5 million. Substantially all of this loss now may be carried back for application against the Company’s taxable income for the year ended January 31, 2015. As the carryback of the NOL was not available until the current fiscal year, the tax benefit associated with the NOL for Fiscal 2020 was recorded in deferred tax assets as of January 31, 2020 in the amount of $8.3 million. With the enactment of the CARES Act, the asset was moved to income taxes receivable (included in other current assets in the condensed consolidated financial statements as of October 31, 2020) with a value of approximately $12.7 million. The carryback provides a favorable rate benefit for the Company as the loss, which was incurred in a year where the statutory federal tax rate was 21%, will be carried back to a tax year where the tax rate was higher. The substantial portion of the net amount of this tax benefit, which is approximately $4.4 million, was recorded in the three-month period ended April 30, 2020 and is, therefore, reflected as income tax benefit in the results for the nine-month period ended October 31, 2020. Research and Development Tax Credits During Fiscal 2019, the Company completed a detailed review of the activities of its engineering staff on major EPC services projects in order to identify and quantify the amounts of research and development credits that may be available to reduce prior year income taxes. This study focused on project costs incurred during the three-year period ended January 31, 2018. Based on the results of the study, management identified and estimated significant amounts of income tax benefits that were not previously recognized in the Company’s operating results for any prior year reporting period. The amount of research and development tax credit benefit recognized during the fourth quarter of Fiscal 2019 was $16.2 million. As described below, the IRS is examining the research and development credits that were included in the amendments of the Company’s consolidated federal income tax returns for the years ended January 31, 2016 and 2017 that were filed in January 2019. The amount of identified but unrecognized income tax benefits related to research and development credits as of October 31, 2020 was $5.0 million, for which the Company has established a liability for uncertain income tax return positions, most of which is included in accrued expenses. The amount of the liability was also $5.0 million as of January 31, 2020. The final outcome of these uncertain tax positions is not yet determinable. However, the Company does not expect that the amount of unrecognized tax benefits will significantly change due to any settlement and/or expiration of statutes of limitation over the next 12 months. As of October 31, 2020, the Company does not believe that it has any other material uncertain income tax positions reflected in its accounts. As of October 31 and January 31, 2020, the balances of other current assets in the condensed consolidated balance sheets included income tax refunds and prepaid income taxes in the net amounts of approximately $27.3 million and $14.5 million, respectively. The substantial portions of the income tax refunds are expected to be collected after the completion of the federal tax return examinations described below and the filing of the refund request related to the NOL carryback described above. Income Tax Returns The Company is subject to federal and state income taxes in the US, and income taxes in Ireland and the UK. Tax treatments within each jurisdiction are subject to the interpretation of the related tax laws and regulations which require significant judgment to apply. The Company is no longer subject to income tax examinations by authorities for its fiscal years ended on or before January 31, 2016 except for several notable exceptions including Ireland, the UK and several states where the open periods are one year longer. The IRS conducted an examination of the Company’s original federal consolidated income tax return for the year ended January 31, 2016. The IRS represented to the Company that no unfavorable adjustment items were noted during this examination. However, the Company has consented to an extension of the audit timeline which is enabling the IRS to also examine the amendment to the income tax return, which includes the research and development credit for the year. In addition, the IRS opened an examination of the Company’s amended consolidated income tax return for the year ended January 31, 2017. In substance, these efforts have evolved into a simultaneously conducted examinations of the research and development credits claimed in both years. In October 2020, the Company received an initial draft communication from the IRS that documents its understanding of the facts, attempts to summarize the Company’s arguments in support of the claims and states its position which disagrees with the Company’s treatment of certain costs. After a careful review of the draft communication, the Company has concluded that its arguments are sound, that the draft information does not represent new facts relating to the issues and that it will not make any adjustments to its accounting for the research and development claims (that is discussed above) as of October 31, 2020. The Company intends to pursue its income tax position with the IRS, and it expects that the ultimate settlement of the disagreement will be resolved on a basis favorable to the Company. Subsequent to October 31, 2020, the Company was notified by the IRS that it intended to examine the consolidated income tax return for the year ended January 31, 2018, with a most likely focus on the research and development credit claimed therein. The Company believes that any resulting disagreements regarding its income taxes for the year ended January 31, 2018 will be resolved on a basis favorable to the Company. Supplemental Cash Flow Information The amounts of cash paid for income taxes during the nine months ended October 31, 2020 and 2019 were $3.8 million and $3.1 million, respectively. During the nine months ended October 31, 2020 and 2019, the Company received cash refunds of previously paid income taxes from various taxing authorities in the total amounts of $0.9 million and $7.9 million, respectively. |
NET INCOME (LOSS) PER SHARE ATT
NET INCOME (LOSS) PER SHARE ATTRIBUTABLE TO THE STOCKHOLDERS OF ARGAN, INC. | 9 Months Ended |
Oct. 31, 2020 | |
NET INCOME (LOSS) PER SHARE ATTRIBUTABLE TO THE STOCKHOLDERS OF ARGAN, INC. | |
NET INCOME (LOSS) PER SHARE ATTRIBUTABLE TO THE STOCKHOLDERS OF ARGAN, INC. | NOTE 11 – NET INCOME (LOSS) PER SHARE ATTRIBUTABLE TO THE STOCKHOLDERS OF ARGAN, INC. Basic and diluted net income (loss) per share amounts are computed as follows (shares in thousands except in notes (1) below the charts): Three Months Ended October 31, 2020 2019 Net income (loss) attributable to the stockholders of Argan, Inc. $ 9,454 $ (6,855) Weighted average number of shares outstanding – basic 15,680 15,633 Effect of stock awards (1) 153 — Weighted average number of shares outstanding – diluted 15,833 15,633 Net income (loss) per share attributable to the stockholders of Argan, Inc. Basic $ 0.60 $ (0.44) Diluted $ 0.60 $ (0.44) (1) For the three months ended October 31, 2020, the weighted average number of shares determined on a dilutive basis excludes the effects of antidilutive stock options covering an aggregate of 506,501 shares of common stock. For the three months ended October 31, 2019, all common stock equivalents, which covered 1,243,000 shares of common stock, were considered to be antidilutive as the Company incurred a net loss for the period. Nine Months Ended October 31, 2020 2019 Net income (loss) attributable to the stockholders of Argan, Inc. $ 14,300 $ (35,501) Weighted average number of shares outstanding – basic 15,659 15,617 Effect of stock awards (1) 136 — Weighted average number of shares outstanding – diluted 15,795 15,617 Net income (loss) per share attributable to the stockholders of Argan, Inc. Basic $ 0.91 $ (2.27) Diluted $ 0.91 $ (2.27) (1) For the nine months ended October 31, 2020, the weighted average number of shares determined on a dilutive basis excludes the effects of antidilutive stock options covering an aggregate of 688,000 shares of common stock. For the nine months ended October 31, 2019, all common stock equivalents, which covered 1,243,000 shares of common stock, were considered to be antidilutive as the Company incurred a net loss for the period. |
CASH DIVIDENDS
CASH DIVIDENDS | 9 Months Ended |
Oct. 31, 2019 | |
CASH DIVIDENDS | |
CASH DIVIDENDS | NOTE 12 – CASH DIVIDENDS On September 10, 2020, the Company’s board of directors declared a regular quarterly cash dividend in the amount of $0.25 per share of common stock, which was paid on October 30, 2020 respectively July 31, 2020 quarterly |
CUSTOMER CONCENTRATIONS
CUSTOMER CONCENTRATIONS | 9 Months Ended |
Oct. 31, 2020 | |
CUSTOMER CONCENTRATIONS | |
CUSTOMER CONCENTRATIONS | NOTE 13 – CUSTOMER CONCENTRATIONS The majority of the Company’s consolidated revenues relate to performance by the power industry services segment which provided 86% and 61% of consolidated revenues for the three months ended October 31, 2020 and 2019, respectively, and 83% and 49% of consolidated revenues for the nine months ended October 31, 2020 and 2019, respectively. The industrial services segment represented 12% and 34% of consolidated revenues for the three months ended October 31, 2020 and 2019, respectively, and 15% and 47% of consolidated revenues for the nine months ended October 31, 2020 and 2019, respectively. The Company’s most significant customer relationships for the three months ended October 31, 2020 included one power industry service customer, which accounted for 70% of consolidated revenues. The Company’s most significant customer relationships for the three months ended October 31, 2019 included two power industry service customers, which accounted for 27% and 17% of consolidated revenues, respectively, and one industrial services customer, which accounted for 10% of consolidated revenues. The Company’s most significant customer relationships for the nine months ended October 31, 2020 included one power industry service customer, which accounted for 69% of consolidated revenues. The Company’s most significant customer relationships for the nine months ended October 31, 2019 also included two power industry service customers, which accounted for 13% and 10% of consolidated revenues, respectively The accounts receivable balances from four major customers represented 24%, 14%, 11% and 10% of the corresponding consolidated balance as of October 31, 2020. Accounts receivable balances from three major customers represented 24%, 21% and 12% of the corresponding consolidated balance as of January 31, 2020. The contract asset balances from two major customers represented 63% and 12% of the corresponding consolidated balance as of October 31, 2020. Contract asset balances from two major customers represented 51% and 31% of the corresponding consolidated balance as of January 31, 2020. |
SEGMENT REPORTING
SEGMENT REPORTING | 9 Months Ended |
Oct. 31, 2020 | |
SEGMENT REPORTING | |
SEGMENT REPORTING | NOTE 14 – SEGMENT REPORTING Segments represent components of an enterprise for which discrete financial information is available that is evaluated regularly by the Company’s chief executive officer, who is the chief operating decision maker, in determining how to allocate resources and in assessing performance. The Company’s reportable segments recognize revenues and incur expenses, are organized in separate business units with different management teams, customers, talents and services, and may include more than one operating segment. Intersegment revenues and the related cost of revenues are netted against the corresponding amounts of the segment receiving the intersegment services. For the three and nine months ended October 31, 2020, intersegment revenues totaled approximately $0.5 million and $1.4 million, respectively. For the three and nine months ended October 31, 2019, intersegment revenues totaled approximately $1.1 million and $2.5 million. Summarized below are certain operating results and financial position data of the Company’s reportable business segments for the three and nine months ended October 31, 2020 and 2019. The “Other” column in each summary includes the Company’s corporate expenses. Three Months Ended Power Industrial Telecom October 31, 2020 Services Services Services Other Totals Revenues $ 109,712 $ 15,730 $ 1,889 $ — $ 127,331 Cost of revenues 91,263 14,218 1,507 — 106,988 Gross profit 18,449 1,512 382 — 20,343 Selling, general and administrative expenses 5,096 1,828 489 1,985 9,398 Income (loss) from operations 13,353 (316) (107) (1,985) 10,945 Other income, net 172 — — 3 175 Income (loss) before income taxes $ 13,525 $ (316) $ (107) $ (1,982) 11,120 Income tax expense (1,666) Net income $ 9,454 Amortization of intangibles $ 62 $ 164 $ — $ — $ 226 Depreciation 178 654 106 2 940 Property, plant and equipment additions 164 34 81 — 279 Current assets $ 392,954 25,404 1,704 118,758 $ 538,820 Current liabilities 245,808 13,762 709 751 261,030 Goodwill 18,476 9,467 — — 27,943 Total assets 425,909 47,356 3,190 119,045 595,500 Three Months Ended Power Industrial Telecom October 31, 2019 Services Services Services Other Totals Revenues $ 35,848 $ 20,143 $ 2,415 $ — $ 58,406 Cost of revenues 31,327 19,159 1,928 — 52,414 Gross profit 4,521 984 487 — 5,992 Selling, general and administrative expenses 7,672 2,018 485 1,960 12,135 (Loss) income from operations (3,151) (1,034) 2 (1,960) (6,143) Other income, net 3,447 — — 131 3,578 Income (loss) before income taxes $ 296 $ (1,034) $ 2 $ (1,829) (2,565) Income tax expense (1,996) Net loss $ (4,561) Amortization of intangibles $ 61 $ 166 $ 45 $ — $ 272 Depreciation 176 625 97 1 899 Property, plant and equipment additions 2,659 436 170 — 3,265 Current assets $ 292,618 $ 28,373 $ 2,861 $ 82,048 $ 405,900 Current liabilities 108,474 8,744 796 943 118,957 Goodwill 18,476 12,290 — — 30,766 Total assets 324,535 55,814 4,370 87,998 472,717 Nine Months Ended Power Industrial Telecom October 31, 2020 Services Services Services Other Totals Revenues $ 227,363 $ 42,163 $ 5,445 $ — $ 274,971 Cost of revenues 192,583 38,096 4,310 — 234,989 Gross profit 34,780 4,067 1,135 — 39,982 Selling, general and administrative expenses 15,892 5,664 1,447 5,824 28,827 Income (loss) from operations 18,888 (1,597) (312) (5,824) 11,155 Other income, net 1,634 — — 80 1,714 Income (loss) before income taxes $ 20,522 $ (1,597) $ (312) $ (5,744) 12,869 Income tax benefit 1,391 Net income $ 14,260 Amortization of intangibles $ 182 495 — — $ 677 Depreciation 522 $ 1,967 $ 305 $ 4 2,798 Property, plant and equipment additions 857 338 217 — 1,412 Nine Months Ended Power Industrial Telecom October 31, 2019 Services Services Services Other Totals Revenues $ 83,941 $ 80,442 $ 6,626 $ — $ 171,009 Cost of revenues 104,759 72,958 5,361 — 183,078 Gross (loss) profit (20,818) 7,484 1,265 — (12,069) Selling, general and administrative expenses 18,977 5,959 1,535 5,290 31,761 Impairment loss 2,072 — — — 2,072 (Loss) income from operations (41,867) 1,525 (270) (5,290) (45,902) Other income, net 7,037 — — 435 7,472 (Loss) income before income taxes $ (34,830) $ 1,525 $ (270) $ (4,855) (38,430) Income tax benefit 4,936 Net loss $ (33,494) Amortization of intangibles $ 231 $ 497 $ 136 $ — $ 864 Depreciation 517 1,791 298 4 2,610 Property, plant and equipment additions 4,533 1,487 277 11 6,308 |
DESCRIPTION OF THE BUSINESS A_2
DESCRIPTION OF THE BUSINESS AND BASIS OF PRESENTATION (Policies) | 9 Months Ended |
Oct. 31, 2020 | |
DESCRIPTION OF THE BUSINESS AND BASIS OF PRESENTATION | |
Description of the Business | Description of the Business Argan, Inc. (“Argan”) conducts operations through its wholly-owned subsidiaries, Gemma Power Systems, LLC and affiliates (“GPS”); The Roberts Company, Inc. (“TRC”); Atlantic Projects Company Limited and affiliates (“APC”) and Southern Maryland Cable, Inc. (“SMC”). Argan and these consolidated subsidiaries are hereinafter collectively referred to as the “Company.” Through GPS and APC, the Company provides a full range of engineering, procurement, construction, commissioning, operations management, maintenance, project development, technical and other consulting services to the power generation market, including the renewable energy sector. The wide range of customers includes independent power producers, public utilities, power plant equipment suppliers and global energy plant construction firms with projects located in the continental United States (the “US”), the Republic of Ireland (“Ireland”) and the United Kingdom (the “UK”). Including consolidated variable interest entities (“VIEs”), GPS and APC represent the Company’s power industry services reportable segment. Through TRC, the industrial fabrication and field services reportable segment provides on-site services that support maintenance turnarounds, shutdowns and emergency mobilizations for industrial plants primarily located in the southeast region of the US and that are based on its expertise in producing, delivering and installing fabricated metal 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 US. |
Basis of Presentation and Significant Accounting Policies | Basis of Presentation and Significant Accounting Policies The condensed consolidated financial statements include the accounts of Argan, its wholly-owned subsidiaries and its financially controlled VIEs. All significant inter-company balances and transactions have been eliminated in consolidation. In Note 14, the Company has provided certain financial information relating to the operating results and assets of its reportable segments based on the manner in which management disaggregates the Company’s financial reporting for purposes of making internal operating decisions. The Company’s fiscal year ends on January 31 each year. The condensed consolidated balance sheet as of October 31, 2020, the condensed consolidated statements of earnings and stockholders’ equity for the three and nine months ended October 31, 2020 and 2019, and the condensed consolidated statements of cash flows for the nine months ended October 31, 2020 and 2019 are unaudited. The condensed consolidated balance sheet as of January 31, 2020 has been derived from audited financial statements. These condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the US Securities and Exchange Commission (the “SEC”). Certain information and note disclosures normally included in annual financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”) have been condensed or omitted pursuant to those rules and regulations, although the Company believes that the disclosures made are adequate to make the information not misleading. The accompanying condensed consolidated financial statements and notes should be read in conjunction with the consolidated financial statements, the notes thereto, and the independent registered public accounting firm’s report thereon, that are included in the Company’s Annual Report on Form 10-K for the fiscal year ended January 31, 2020 (“Fiscal 2020”). In the opinion of management, the accompanying condensed consolidated financial statements contain all adjustments, which are of a normal and recurring nature, considered necessary to present fairly the financial position of the Company as of October 31, 2020, and its earnings and cash flows for the interim periods presented. The results of operations for any interim period are not necessarily indicative of the results of operations for any other interim period or for a full fiscal year. Accounting Policies In December 2019, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) 2019-12, Simplifying the Accounting for Income Taxes In 2016, the FASB issued ASU 2016-13, Measurement of Credit Losses on Financial Instruments There are no other recently issued accounting pronouncements that have not yet been adopted that the Company considers material to its condensed consolidated financial statements. The carrying value amounts presented in the condensed consolidated balance sheets for the Company’s current assets, which primarily include cash and cash equivalents, short-term investments, accounts receivable and contract assets, and its current liabilities are reasonable estimates of their fair values due to the short-term nature of these items. |
Variable Interest Entity | Variable Interest Entity In January 2018, the Company was deemed to be the primary beneficiary of a VIE that is performing the project development activities related to the planned construction of a new natural gas-fired power plant. Consideration for the Company’s engineering and financial support includes the right to build the power plant pursuant to a turnkey engineering, procurement and construction (“EPC”) services contract that has been negotiated and announced. The account balances of the VIE are included in the condensed consolidated financial statements, including development costs incurred by the VIE during the three and nine-month periods ended October 31, 2020 and 2019. The total amounts of the project development costs included in the balances for property, plant and equipment as of October 31 and January 31, 2020 were $7.4 million and $6.9 million, respectively. Recovery of the Company's investment in this project will most likely depend on the successful completion of the project development efforts, including the arrangement of financing for the construction and operation of the corresponding power plant. |
REVENUES FROM CONTRACT WITH C_2
REVENUES FROM CONTRACT WITH CUSTOMERS (Tables) | 9 Months Ended |
Oct. 31, 2020 | |
REVENUES FROM CONTRACT WITH CUSTOMERS | |
Schedule of consolidated revenues disaggregated by geographical area | Three Months Ended Nine Months Ended October 31, October 31, 2020 2019 2020 2019 United States $ 109,241 $ 39,629 $ 241,616 $ 117,045 United Kingdom 9,759 10,349 22,595 35,631 Republic of Ireland 8,331 8,256 10,760 18,007 Other — 172 — 326 Consolidated Revenues $ 127,331 $ 58,406 $ 274,971 $ 171,009 |
PURCHASED INTANGIBLE ASSETS (Ta
PURCHASED INTANGIBLE ASSETS (Tables) | 9 Months Ended |
Oct. 31, 2020 | |
PURCHASED INTANGIBLE ASSETS | |
Schedule of company's purchased intangible assets, other than goodwill | October 31, 2020 January 31, Estimated Gross Accumulated Net 2020, (net Useful Life Amounts Amortization Amount amounts) Trade names 15 years $ 8,142 $ 4,849 $ 3,293 $ 3,699 Process certifications 7 years 1,897 1,332 565 768 Customer relationships 4-10 years 1,346 880 466 534 Totals $ 11,385 $ 7,061 $ 4,324 $ 5,001 |
COMMITMENTS (Tables)
COMMITMENTS (Tables) | 9 Months Ended |
Oct. 31, 2020 | |
COMMITMENTS | |
Schedule of future minimum lease payments for the operating leases | Years Ending January 31, Remainder of 2021 $ 505 2022 1,648 2023 856 2024 242 2025 85 Thereafter 20 Total lease payments 3,356 Less interest portion 90 Present value of lease payments 3,266 Less current portion (included in accrued expenses) 2,760 Non-current portion $ 506 |
STOCK-BASED COMPENSATION (Table
STOCK-BASED COMPENSATION (Tables) | 9 Months Ended |
Oct. 31, 2020 | |
STOCK-BASED COMPENSATION | |
Schedule of stock option activity under the Company's stock plans | Summaries of stock option activity under the Company’s approved stock option plans for the nine months ended October 31, 2020 and 2019, along with corresponding weighted average per share amounts, are presented below (shares in thousands): Exercise Remaining Shares Price Term (years) Fair Value Outstanding, February 1, 2020 1,271 $ 44.83 7.18 $ 11.06 Granted 172 $ 33.81 Exercised (55) $ 22.69 Forfeited (24) $ 55.61 Outstanding, October 31, 2020 1,364 $ 44.14 6.96 $ 10.52 Exercisable, October 31, 2020 865 $ 46.40 5.97 $ 11.76 Exercise Remaining Shares Price Term (years) Fair Value Outstanding, February 1, 2019 1,140 $ 44.01 7.54 $ 11.22 Granted 168 $ 46.67 Exercised (59) $ 26.36 Forfeited (38) $ 46.34 Outstanding, October 31, 2019 1,211 $ 45.18 7.28 $ 11.27 Exercisable, October 31, 2019 753 $ 45.81 6.25 $ 10.22 |
Schedule of changes in the number of non-vested options to purchase shares of common stock | The changes in the number of non-vested options to purchase shares of common stock for the nine months ended October 31, 2020 and 2019, and the weighted average fair value per share for each number, are presented below (shares in thousands): Shares Fair Value Non-vested, February 1, 2020 448 $ 9.74 Granted 172 $ 5.68 Vested (112) $ 9.81 Forfeitures (9) $ 8.08 Non-vested, October 31, 2020 499 $ 8.35 Shares Fair Value Non-vested, February 1, 2019 375 $ 10.05 Granted 168 $ 10.32 Vested (57) $ 9.28 Forfeitures (28) $ 10.47 Non-vested, October 31, 2019 458 $ 10.22 |
Summary of assumptions used to estimate fair value of stock options granted | Nine Months Ended October 31, 2020 2019 Dividend yield 3.0 % 2.2 % Expected volatility 30.0 % 33.1 % Risk-free interest rate 0.5 % 2.0 % Expected life (in years) 3.4 3.3 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 9 Months Ended |
Oct. 31, 2020 | |
INCOME TAXES | |
Schedule of actual income tax expense amounts | Nine Months Ended October 31, 2020 2019 Computed expected income tax (expense) benefit $ (2,702) $ 8,070 Difference resulting from: Net operating loss carryback 4,390 — Foreign tax rate differential (77) (766) Stock options 66 (170) State income taxes, net of federal tax effect (40) 185 Net operating losses deemed unrealizable — (6,280) Bad debt loss — 5,026 Adjustments and other differences (246) (1,129) Income tax benefit $ 1,391 $ 4,936 |
NET INCOME (LOSS) PER SHARE A_2
NET INCOME (LOSS) PER SHARE ATTRIBUTABLE TO THE STOCKHOLDERS OF ARGAN, INC. (Tables) | 9 Months Ended |
Oct. 31, 2020 | |
NET INCOME (LOSS) PER SHARE ATTRIBUTABLE TO THE STOCKHOLDERS OF ARGAN, INC. | |
Schedule of computations of basic and diluted net income (loss) per share | Basic and diluted net income (loss) per share amounts are computed as follows (shares in thousands except in notes (1) below the charts): Three Months Ended October 31, 2020 2019 Net income (loss) attributable to the stockholders of Argan, Inc. $ 9,454 $ (6,855) Weighted average number of shares outstanding – basic 15,680 15,633 Effect of stock awards (1) 153 — Weighted average number of shares outstanding – diluted 15,833 15,633 Net income (loss) per share attributable to the stockholders of Argan, Inc. Basic $ 0.60 $ (0.44) Diluted $ 0.60 $ (0.44) (1) For the three months ended October 31, 2020, the weighted average number of shares determined on a dilutive basis excludes the effects of antidilutive stock options covering an aggregate of 506,501 shares of common stock. For the three months ended October 31, 2019, all common stock equivalents, which covered 1,243,000 shares of common stock, were considered to be antidilutive as the Company incurred a net loss for the period. Nine Months Ended October 31, 2020 2019 Net income (loss) attributable to the stockholders of Argan, Inc. $ 14,300 $ (35,501) Weighted average number of shares outstanding – basic 15,659 15,617 Effect of stock awards (1) 136 — Weighted average number of shares outstanding – diluted 15,795 15,617 Net income (loss) per share attributable to the stockholders of Argan, Inc. Basic $ 0.91 $ (2.27) Diluted $ 0.91 $ (2.27) (1) For the nine months ended October 31, 2020, the weighted average number of shares determined on a dilutive basis excludes the effects of antidilutive stock options covering an aggregate of 688,000 shares of common stock. For the nine months ended October 31, 2019, all common stock equivalents, which covered 1,243,000 shares of common stock, were considered to be antidilutive as the Company incurred a net loss for the period. |
DESCRIPTION OF THE BUSINESS A_3
DESCRIPTION OF THE BUSINESS AND BASIS OF PRESENTATION (Details) - USD ($) $ in Millions | 9 Months Ended | 12 Months Ended |
Oct. 31, 2020 | Jan. 31, 2020 | |
DESCRIPTION OF THE BUSINESS AND BASIS OF PRESENTATION | ||
Cost of property, plant and equipment | $ 7.4 | $ 6.9 |
REVENUES FROM CONTRACT WITH C_3
REVENUES FROM CONTRACT WITH CUSTOMERS (Details) - USD ($) $ in Millions | Oct. 31, 2020 | Jan. 31, 2020 |
REVENUES FROM CONTRACT WITH CUSTOMERS | ||
Retained amounts by project owners | $ 32.5 | $ 20 |
Amounts of unpriced change orders included in transaction prices | 8 | 21.2 |
REVENUES FROM CONTRACT WITH C_4
REVENUES FROM CONTRACT WITH CUSTOMERS - Accounting for the Loss Subcontract (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Oct. 31, 2020 | Oct. 31, 2019 | Oct. 31, 2020 | Oct. 31, 2019 | Jan. 31, 2020 | Mar. 24, 2020 | |
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||||
Provision for contract loss | $ 5.8 | |||||
TeesREPProject | ||||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||||
Loss recorded | $ 0.3 | $ 31.2 | ||||
Reversal of profit | $ 0.7 | |||||
Percentage of completion of subcontracted work | 90.00% | |||||
Reduction to the subcontract loss | $ (2.8) | $ (4.1) | ||||
Subcontract loss | (29.5) | |||||
The total amounts of accounts receivable and contract assets with the customer | $ 7.3 | $ 19.2 |
REVENUES FROM CONTRACT WITH C_5
REVENUES FROM CONTRACT WITH CUSTOMERS - Remaining Unsatisfied Performance Obligations (Details) - Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-11-01 $ in Millions | Oct. 31, 2020USD ($) |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Contract backlog amount | $ 604.7 |
Contract backlog (as percent) | 63.00% |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period | 12 months |
REVENUES FROM CONTRACT WITH C_6
REVENUES FROM CONTRACT WITH CUSTOMERS - Disaggregation of Revenues (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Oct. 31, 2020 | Oct. 31, 2019 | Oct. 31, 2020 | Oct. 31, 2019 | |
Disaggregation of Revenues | ||||
Totals | $ 127,331 | $ 58,406 | $ 274,971 | $ 171,009 |
United States | ||||
Disaggregation of Revenues | ||||
Totals | 109,241 | 39,629 | 241,616 | 117,045 |
United Kingdom | ||||
Disaggregation of Revenues | ||||
Totals | 9,759 | 10,349 | 22,595 | 35,631 |
Republic of Ireland | ||||
Disaggregation of Revenues | ||||
Totals | $ 8,331 | 8,256 | $ 10,760 | 18,007 |
Other | ||||
Disaggregation of Revenues | ||||
Totals | $ 172 | $ 326 |
CASH, CASH EQUIVALENTS AND SH_2
CASH, CASH EQUIVALENTS AND SHORT-TERM INVESTMENTS (Details) - Held-to-maturity Securities - USD ($) $ in Millions | 9 Months Ended | 12 Months Ended |
Oct. 31, 2020 | Jan. 31, 2020 | |
Cash and Cash Equivalents | ||
Maturity period | 292 days | 165 days |
Accrued interest on held-to-maturity securities | $ 0.5 | |
Weighted average annual interest rates of CDs (as a percent) | 0.20% | 1.80% |
ACCOUNTS AND NOTES RECEIVABLE (
ACCOUNTS AND NOTES RECEIVABLE (Details) $ in Millions | Oct. 31, 2020USD ($) |
ACCOUNTS AND NOTES RECEIVABLE | |
Outstanding balances of accounts receivable and contract assets | $ 24.5 |
Past due notes receivable | $ 1.7 |
PURCHASED INTANGIBLE ASSETS - G
PURCHASED INTANGIBLE ASSETS - Goodwill and Finite Lived Intangible Assets (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Apr. 30, 2019 | Oct. 31, 2020 | Oct. 31, 2019 | Jan. 31, 2020 | |
Indefinite-Lived Intangible Assets | ||||
Goodwill | $ 27,943 | $ 30,766 | $ 27,943 | |
Goodwill changes | 0 | 0 | ||
Impairment loss | $ 2,072 | |||
Intangible Assets - Gross Carrying Amount | 11,385 | |||
Accumulated Amortization | 7,061 | |||
Finite Lived Intangible Assets - Net Amount | 4,324 | 5,001 | ||
APC | ||||
Indefinite-Lived Intangible Assets | ||||
Impairment loss | $ 2,100 | |||
GPS | ||||
Indefinite-Lived Intangible Assets | ||||
Goodwill | 18,500 | 18,500 | ||
TRC | ||||
Indefinite-Lived Intangible Assets | ||||
Goodwill | $ 9,500 | 9,500 | ||
Trade names | ||||
Indefinite-Lived Intangible Assets | ||||
Finite-Lived Intangible Assets - Estimated Useful Life | 15 years | |||
Intangible Assets - Gross Carrying Amount | $ 8,142 | |||
Accumulated Amortization | 4,849 | |||
Finite Lived Intangible Assets - Net Amount | $ 3,293 | 3,699 | ||
Process certifications | ||||
Indefinite-Lived Intangible Assets | ||||
Finite-Lived Intangible Assets - Estimated Useful Life | 7 years | |||
Intangible Assets - Gross Carrying Amount | $ 1,897 | |||
Accumulated Amortization | 1,332 | |||
Finite Lived Intangible Assets - Net Amount | 565 | 768 | ||
Customer relationships | ||||
Indefinite-Lived Intangible Assets | ||||
Intangible Assets - Gross Carrying Amount | 1,346 | |||
Accumulated Amortization | 880 | |||
Finite Lived Intangible Assets - Net Amount | $ 466 | $ 534 | ||
Customer relationships | Maximum | ||||
Indefinite-Lived Intangible Assets | ||||
Finite-Lived Intangible Assets - Estimated Useful Life | 10 years | |||
Customer relationships | Minimum | ||||
Indefinite-Lived Intangible Assets | ||||
Finite-Lived Intangible Assets - Estimated Useful Life | 4 years |
FINANCING ARRANGEMENTS (Details
FINANCING ARRANGEMENTS (Details) - USD ($) $ in Millions | May 15, 2017 | Oct. 31, 2020 | Jan. 31, 2020 |
Financing Arrangements | |||
Amount of an outstanding letter of credit issued by Bank in support of project development activities and deposited with the Bank as collateral | $ 3.4 | ||
London Interbank Offered Rate (LIBOR) | |||
Financing Arrangements | |||
Interest rate margin on referred rate | 2.00% | ||
Revolving Credit Facility | London Interbank Offered Rate (LIBOR) | |||
Financing Arrangements | |||
Variable rate | 30-day LIBOR | ||
Interest rate margin on referred rate | 2.00% | ||
Revolving Credit Facility | Expires on May 31, 2021 | |||
Financing Arrangements | |||
Borrowing available under financing arrangements | $ 50 | ||
Letter of Credit | |||
Financing Arrangements | |||
Borrowings outstanding under Bank financing arrangements | $ 0 | $ 0 | |
Letters of credit outstanding amount | $ 1.7 | $ 9.9 |
COMMITMENTS - Future minimum le
COMMITMENTS - Future minimum lease payments (Details) $ in Thousands | Oct. 31, 2020USD ($) |
Operating Leases | |
Remainder of 2021 | $ 505 |
2022 | 1,648 |
2023 | 856 |
2024 | 242 |
2025 | 85 |
Thereafter | 20 |
Total lease payments | 3,356 |
Less interest portion | 90 |
Present value of lease payments | 3,266 |
Less current portion (included in accrued expenses) | $ 2,760 |
Less current portion (included in accrued expenses) | us-gaap:AccruedLiabilitiesCurrent |
Non-current portion | $ 506 |
COMMITMENTS - Warranties (Detai
COMMITMENTS - Warranties (Details) | 9 Months Ended |
Oct. 31, 2020 | |
Minimum | |
Warranty period | 9 months |
Maximum | |
Warranty period | 24 months |
COMMITMENTS - Leases (Details)
COMMITMENTS - Leases (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Oct. 31, 2020 | Oct. 31, 2019 | Oct. 31, 2020 | Oct. 31, 2019 | |
Operating leases, options to extend | true | |||
Operating leases, options to terminate | true | |||
Operating lease expense | $ 500 | $ 100 | $ 1,318 | $ 637 |
Operating lease payments | $ 300 | 200 | $ 1,200 | 600 |
Weighted average lease term | 32 months | 32 months | ||
Weighted average discount rate | 3.30% | 3.30% | ||
Surety Bond | ||||
Outstanding letter of credit replaced with Surety bond | $ 7,600 | $ 7,600 | ||
London Interbank Offered Rate (LIBOR) | ||||
Interest rate margin on referred rate | 2.00% | |||
TRC | ||||
April 30, 2021 | 300 | $ 300 | ||
GPS | ||||
Future minimum lease payment | 500 | 2,300 | ||
GPS | Financial guarantee | ||||
Guarantor obligation maximum exposure | 3,600 | 3,600 | ||
Costs of Revenues | ||||
Rent expense | 2,300 | 900 | 4,200 | 3,200 |
Selling, General and Administrative Expenses | ||||
Rent expense | $ 200 | $ 100 | $ 700 | $ 500 |
STOCK-BASED COMPENSATION - Summ
STOCK-BASED COMPENSATION - Summary of Activity under Company's Stock Option Plans (Details) - $ / shares shares in Thousands | 9 Months Ended | 12 Months Ended | ||
Oct. 31, 2020 | Oct. 31, 2019 | Jan. 31, 2020 | Jan. 31, 2019 | |
STOCK-BASED COMPENSATION | ||||
Shares, Outstanding, Beginning balance | 1,271 | 1,140 | 1,140 | |
Shares, Granted | 172 | 168 | ||
Shares, Exercised | (55) | (59) | ||
Shares, Forfeited | (24) | (38) | ||
Shares, Outstanding, Ending balance | 1,364 | 1,211 | 1,271 | 1,140 |
Shares, Exercisable | 865 | 753 | ||
Weighted Average Exercise Price, Outstanding, Beginning balance | $ 44.83 | $ 44.01 | $ 44.01 | |
Weighted Average Exercise Price, Granted | 33.81 | 46.67 | ||
Weighted Average Exercise Price, Exercised | 22.69 | 26.36 | ||
Weighted Average Exercise Price, Forfeited | 55.61 | 46.34 | ||
Weighted Average Exercise Price, Outstanding, Ending balance | 44.14 | 45.18 | $ 44.83 | $ 44.01 |
Weighted Average Exercise Price, Exercisable | $ 46.40 | $ 45.81 | ||
Weighted Average Remaining Term (Years), Outstanding | 6 years 11 months 15 days | 7 years 3 months 10 days | 7 years 2 months 4 days | 7 years 6 months 14 days |
Weighted Average Remaining Term (Years), Exercisable | 5 years 11 months 19 days | 6 years 3 months | ||
Weighted Average Fair Value, Outstanding | $ 10.52 | $ 11.27 | $ 11.06 | $ 11.22 |
Weighted Average Fair Value, Exercisable | $ 11.76 | $ 10.22 |
STOCK-BASED COMPENSATION - Su_2
STOCK-BASED COMPENSATION - Summary of Change in Number of Non-Vested Options to Purchase Shares of Common Stock (Details) - $ / shares shares in Thousands | 9 Months Ended | |
Oct. 31, 2020 | Oct. 31, 2019 | |
STOCK-BASED COMPENSATION | ||
Shares, Non-vested, Beginning balance | 448 | 375 |
Shares, Granted | 172 | 168 |
Shares, Vested | (112) | (57) |
Shares, Forfeitures | (9) | (28) |
Shares, Non-vested, Ending balance | 499 | 458 |
Weighted Average Fair Value, Non-vested, Beginning balance | $ 9.74 | $ 10.05 |
Weighted Average Fair Value, Granted | 5.68 | 10.32 |
Weighted Average Fair Value, Vested | 9.81 | 9.28 |
Weighted Average Fair Value, Forfeitures | 8.08 | 10.47 |
Weighted Average Fair Value, Non-vested, Ending balance | $ 8.35 | $ 10.22 |
STOCK-BASED COMPENSATION - Su_3
STOCK-BASED COMPENSATION - Summary of Assumptions Used to Estimate Fair Value of Stock Options Granted (Details) - Stock Options Plans | 9 Months Ended | |
Oct. 31, 2020 | Oct. 31, 2019 | |
Share-based Compensation Arrangement by Share-based Payment Award | ||
Dividend yield | 3.00% | 2.20% |
Expected volatility | 30.00% | 33.10% |
Risk-free interest rate | 0.50% | 2.00% |
Expected life (in years) | 3 years 4 months 24 days | 3 years 3 months 18 days |
STOCK-BASED COMPENSATION - Addi
STOCK-BASED COMPENSATION - Additional Information (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||||
Oct. 31, 2020USD ($)shares | Apr. 30, 2020shares | Oct. 31, 2019USD ($) | Apr. 30, 2019shares | Apr. 30, 2018shares | Oct. 31, 2020USD ($)personshares | Oct. 31, 2019USD ($) | Jun. 23, 2020shares | |
Share-based Compensation Arrangement by Share-based Payment Award | ||||||||
Percentage Reduction In The Aggregate Fair Value Of Stock Option | 88.50% | |||||||
Percentage reduction in the aggregate fair value of stock option | 88.50% | |||||||
Stock compensation expense | $ 800 | $ 600 | $ 2,199 | $ 1,512 | ||||
Unrecognized compensation cost | 3,800 | $ 3,800 | ||||||
Compensation expense recognize, period | 3 years | |||||||
Intrinsic value of outstanding stock options | 4,700 | $ 4,700 | ||||||
Intrinsic value of exercisable stock options | $ 3,300 | $ 3,300 | ||||||
Period used for calculations | 5 years | |||||||
Minimum | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award | ||||||||
Period used for calculations | 3 years | |||||||
Maximum | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award | ||||||||
Period used for calculations | 5 years | |||||||
2020 Plan | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award | ||||||||
Number of shares of common stock reserved for issuance | shares | 500,000 | |||||||
Stock Options Plans | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award | ||||||||
Initial vesting percentage | 33.33% | |||||||
Period to become exercisable | 3 years | |||||||
Number of shares of common stock available for award | shares | 688,999 | 688,999 | ||||||
Number of shares of common stock reserved for issuance | shares | 2,170,400 | 2,170,400 | ||||||
Intrinsic value of the stock options exercised | $ 1,200 | $ 1,400 | ||||||
ISOs/NSOs | 2011 Plan | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award | ||||||||
Incentive stock option award maximum expiration period | 10 years | |||||||
Senior executives | Performance-based restricted stock units | 2011 Plan | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award | ||||||||
Period to become exercisable | 3 years | |||||||
Number of executives | person | 2 | |||||||
Percentage of the maximum shares for the target number of shares awarded | 50.00% | |||||||
Senior executives | Performance-based restricted stock units | 2011 Plan | Maximum | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award | ||||||||
Number of shares awarded | shares | 45,000 | 36,000 | 36,000 |
INCOME TAXES - Income Tax Expen
INCOME TAXES - Income Tax Expense Reconciliation (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Oct. 31, 2020 | Apr. 30, 2020 | Oct. 31, 2019 | Oct. 31, 2020 | Oct. 31, 2019 | Jan. 31, 2020 | |
Federal corporate income tax rate (as percent) | 21.00% | 21.00% | ||||
Computed expected income tax (expense) benefit | $ (2,702) | $ 8,070 | ||||
Net operating loss carryback | $ 4,400 | 4,390 | ||||
Foreign tax rate differential | (77) | (766) | ||||
Stock options | 66 | (170) | ||||
State income taxes, net of federal tax effect | (40) | 185 | ||||
Net operating losses deemed unrealizable | (6,280) | |||||
Bad debt loss | 5,026 | |||||
Adjustments and other permanent differences | (246) | (1,129) | ||||
Income tax benefit | $ (1,666) | $ (1,996) | 1,391 | 4,936 | ||
Tax benefit from subsidiaries | $ 100 | |||||
United Kingdom | ||||||
Deferred tax valuation allowance | $ 6,300 | $ 6,300 |
INCOME TAXES - Net Operating Lo
INCOME TAXES - Net Operating Loss Carryback (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended |
Apr. 30, 2020 | Oct. 31, 2020 | Jan. 31, 2020 | |
Operating Loss Carryforwards [Line Items] | |||
Increase in loss carryback period for certain losses | 5 years | ||
Domestic net operating loss carryback | $ 39,500 | ||
Deferred tax asset operating loss carryforward | $ 8,300 | ||
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent | 21.00% | 21.00% | |
Amount of rate difference tax benefit | $ 4,400 | $ 4,390 | |
Other current assets | |||
Operating Loss Carryforwards [Line Items] | |||
Income tax receivable | $ 12,700 |
INCOME TAXES - Research and Dev
INCOME TAXES - Research and Development Tax Credits (Details) - USD ($) $ in Millions | 12 Months Ended | |||
Jan. 31, 2018 | Oct. 31, 2020 | Jan. 31, 2020 | Jan. 31, 2019 | |
INCOME TAXES | ||||
Prior period for identify and quantify the amounts of research and development credits | 3 years | |||
Research and development tax credit benefit | $ 16.2 | |||
Unrecognized income tax benefits related to research and development credits | $ 5 | |||
Amount of unrecognized income tax benefits liability | $ 5 | |||
Income tax refunds and prepaid income taxes | $ 27.3 | $ 14.5 |
INCOME TAXES - Supplemental Cas
INCOME TAXES - Supplemental Cash Flow Information (Details) - USD ($) $ in Millions | 9 Months Ended | |
Oct. 31, 2020 | Oct. 31, 2019 | |
INCOME TAXES | ||
Income Taxes Paid | $ 3.8 | $ 3.1 |
Proceeds from Income Tax Refunds | $ 0.9 | $ 7.9 |
NET INCOME (LOSS) PER SHARE A_3
NET INCOME (LOSS) PER SHARE ATTRIBUTABLE TO THE STOCKHOLDERS OF ARGAN, INC. (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Oct. 31, 2020 | Oct. 31, 2019 | Oct. 31, 2020 | Oct. 31, 2019 | |
NET INCOME (LOSS) PER SHARE ATTRIBUTABLE TO THE STOCKHOLDERS OF ARGAN, INC. | ||||
Net income (loss) attributable to the stockholders of Argan, Inc. | $ 9,454 | $ (6,855) | $ 14,300 | $ (35,501) |
Weighted average number of shares outstanding - basic | 15,680 | 15,633 | 15,659 | 15,617 |
Effects of stock awards | 153 | 136 | ||
Weighted average number of shares outstanding - diluted | 15,833 | 15,633 | 15,795 | 15,617 |
Basic (in Dollars per share) | $ 0.60 | $ (0.44) | $ 0.91 | $ (2.27) |
Diluted (in Dollars per share) | $ 0.60 | $ (0.44) | $ 0.91 | $ (2.27) |
NET INCOME (LOSS) PER SHARE A_4
NET INCOME (LOSS) PER SHARE ATTRIBUTABLE TO THE STOCKHOLDERS OF ARGAN, INC. - Additional information (Details) - shares | 3 Months Ended | 9 Months Ended | ||
Oct. 31, 2020 | Oct. 31, 2019 | Oct. 31, 2020 | Oct. 31, 2019 | |
NET INCOME (LOSS) PER SHARE ATTRIBUTABLE TO THE STOCKHOLDERS OF ARGAN, INC. | ||||
Antidilutive common stock | 506,501 | 1,243,000 | 688,000 | 1,243,000 |
CASH DIVIDENDS (Details)
CASH DIVIDENDS (Details) - $ / shares | Oct. 31, 2020 | Oct. 30, 2020 | Sep. 10, 2020 | Jul. 31, 2020 | Jun. 23, 2020 | Apr. 30, 2020 | Apr. 09, 2020 | Jul. 31, 2019 | Apr. 30, 2019 | Oct. 31, 2020 | Oct. 31, 2019 | Oct. 31, 2020 | Oct. 31, 2019 | Jan. 31, 2020 |
CASH DIVIDENDS | ||||||||||||||
Regular cash dividend declared per common stock | $ 0.25 | $ 0.25 | $ 0.25 | $ 0.25 | $ 0.25 | $ 1.75 | $ 0.75 | |||||||
Regular cash dividend paid per common stock | $ 0.25 | $ 0.25 | $ 0.25 | $ 0.25 | $ 0.25 | $ 0.25 | ||||||||
Regular quarterly cash dividend declared per common stock | $ 0.25 | |||||||||||||
Special Cash dividend declared per common stock | $ 1 | |||||||||||||
Special cash dividend paid per common stock | $ 1 |
CUSTOMER CONCENTRATIONS (Detail
CUSTOMER CONCENTRATIONS (Details) - customer | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Oct. 31, 2020 | Oct. 31, 2019 | Oct. 31, 2020 | Oct. 31, 2019 | Jan. 31, 2020 | |
Accounts Receivable | |||||
Customer Concentrations | |||||
Number of customers | 4 | 3 | |||
Contract Asset | |||||
Customer Concentrations | |||||
Number of customers | 2 | 2 | |||
Major Customer One | Accounts Receivable | |||||
Customer Concentrations | |||||
Percentage of consolidated accounts receivable accounted by major customer | 24.00% | 24.00% | |||
Major Customer One | Contract Asset | |||||
Customer Concentrations | |||||
Percentage of major customers or segments | 63.00% | 51.00% | |||
Major Customer Two | Accounts Receivable | |||||
Customer Concentrations | |||||
Percentage of consolidated accounts receivable accounted by major customer | 14.00% | 21.00% | |||
Major Customer Two | Contract Asset | |||||
Customer Concentrations | |||||
Percentage of major customers or segments | 12.00% | 31.00% | |||
Major Customer Three | Accounts Receivable | |||||
Customer Concentrations | |||||
Percentage of consolidated accounts receivable accounted by major customer | 11.00% | 12.00% | |||
Major Customer Four | Accounts Receivable | |||||
Customer Concentrations | |||||
Percentage of consolidated accounts receivable accounted by major customer | 10.00% | ||||
Power Services | Revenue | |||||
Customer Concentrations | |||||
Percentage of major customers or segments | 86.00% | 61.00% | 83.00% | 49.00% | |
Number of customers | 1 | 2 | 1 | 2 | |
Power Services | Major Customer One | Revenue | |||||
Customer Concentrations | |||||
Percentage of major customers or segments | 70.00% | 27.00% | 69.00% | 13.00% | |
Power Services | Major Customer Two | Revenue | |||||
Customer Concentrations | |||||
Percentage of major customers or segments | 17.00% | 10.00% | |||
Industry services | Revenue | |||||
Customer Concentrations | |||||
Percentage of major customers or segments | 12.00% | 34.00% | 15.00% | 47.00% | |
Number of customers | 1 | ||||
Industry services | Major Customer One | Revenue | |||||
Customer Concentrations | |||||
Percentage of major customers or segments | 10.00% |
SEGMENT REPORTING (Details)
SEGMENT REPORTING (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Oct. 31, 2020USD ($) | Oct. 31, 2019USD ($) | Oct. 31, 2020USD ($)segment | Oct. 31, 2019USD ($) | Jan. 31, 2020USD ($) | |
Segment Reporting Information | |||||
Operating segment | segment | 1 | ||||
Revenues | $ 127,331 | $ 58,406 | $ 274,971 | $ 171,009 | |
Cost of revenues | 106,988 | 52,414 | 234,989 | 183,078 | |
Gross (loss) profit | 20,343 | 5,992 | 39,982 | (12,069) | |
Selling, general and administrative expenses | 9,398 | 12,135 | 28,827 | 31,761 | |
Impairment loss | 2,072 | ||||
(Loss) income from operations | 10,945 | (6,143) | 11,155 | (45,902) | |
Other income, net | 175 | 3,578 | 1,714 | 7,472 | |
(Loss) income before income taxes | 11,120 | (2,565) | 12,869 | (38,430) | |
Income tax (expense) benefit (Note 10) | (1,666) | (1,996) | 1,391 | 4,936 | |
Net income (loss) | 9,454 | (4,561) | 14,260 | (33,494) | |
Amortization of intangibles | 226 | 272 | 677 | 864 | |
Depreciation | 940 | 899 | 2,798 | 2,610 | |
Property, plant and equipment additions | 279 | 3,265 | 1,412 | 6,308 | |
Current assets | 538,820 | 405,900 | 538,820 | 405,900 | $ 421,755 |
Current liabilities | 261,030 | 118,957 | 261,030 | 118,957 | 144,034 |
Goodwill | 27,943 | 30,766 | 27,943 | 30,766 | 27,943 |
Total assets | 595,500 | 472,717 | 595,500 | 472,717 | $ 487,540 |
Other | |||||
Segment Reporting Information | |||||
Selling, general and administrative expenses | 1,985 | 1,960 | 5,824 | 5,290 | |
(Loss) income from operations | (1,985) | (1,960) | (5,824) | (5,290) | |
Other income, net | 3 | 131 | 80 | 435 | |
(Loss) income before income taxes | (1,982) | (1,829) | (5,744) | (4,855) | |
Depreciation | 2 | 1 | 4 | 4 | |
Property, plant and equipment additions | 11 | ||||
Current assets | 118,758 | 82,048 | 118,758 | 82,048 | |
Current liabilities | 751 | 943 | 751 | 943 | |
Total assets | 119,045 | 87,998 | 119,045 | 87,998 | |
Intercompany Eliminations | |||||
Segment Reporting Information | |||||
Revenues | 500 | 1,100 | 1,400 | 2,500 | |
Power Services | |||||
Segment Reporting Information | |||||
Revenues | 109,712 | 35,848 | 227,363 | 83,941 | |
Cost of revenues | 91,263 | 31,327 | 192,583 | 104,759 | |
Gross (loss) profit | 18,449 | 4,521 | 34,780 | (20,818) | |
Selling, general and administrative expenses | 5,096 | 7,672 | 15,892 | 18,977 | |
Impairment loss | 2,072 | ||||
(Loss) income from operations | 13,353 | (3,151) | 18,888 | (41,867) | |
Other income, net | 172 | 3,447 | 1,634 | 7,037 | |
(Loss) income before income taxes | 13,525 | 296 | 20,522 | (34,830) | |
Amortization of intangibles | 62 | 61 | 182 | 231 | |
Depreciation | 178 | 176 | 522 | 517 | |
Property, plant and equipment additions | 164 | 2,659 | 857 | 4,533 | |
Current assets | 392,954 | 292,618 | 392,954 | 292,618 | |
Current liabilities | 245,808 | 108,474 | 245,808 | 108,474 | |
Goodwill | 18,476 | 18,476 | 18,476 | 18,476 | |
Total assets | 425,909 | 324,535 | 425,909 | 324,535 | |
Industrial Services | |||||
Segment Reporting Information | |||||
Revenues | 15,730 | 20,143 | 42,163 | 80,442 | |
Cost of revenues | 14,218 | 19,159 | 38,096 | 72,958 | |
Gross (loss) profit | 1,512 | 984 | 4,067 | 7,484 | |
Selling, general and administrative expenses | 1,828 | 2,018 | 5,664 | 5,959 | |
(Loss) income from operations | (316) | (1,034) | (1,597) | 1,525 | |
(Loss) income before income taxes | (316) | (1,034) | (1,597) | 1,525 | |
Amortization of intangibles | 164 | 166 | 495 | 497 | |
Depreciation | 654 | 625 | 1,967 | 1,791 | |
Property, plant and equipment additions | 34 | 436 | 338 | 1,487 | |
Current assets | 25,404 | 28,373 | 25,404 | 28,373 | |
Current liabilities | 13,762 | 8,744 | 13,762 | 8,744 | |
Goodwill | 9,467 | 12,290 | 9,467 | 12,290 | |
Total assets | 47,356 | 55,814 | 47,356 | 55,814 | |
Telecom Services | |||||
Segment Reporting Information | |||||
Revenues | 1,889 | 2,415 | 5,445 | 6,626 | |
Cost of revenues | 1,507 | 1,928 | 4,310 | 5,361 | |
Gross (loss) profit | 382 | 487 | 1,135 | 1,265 | |
Selling, general and administrative expenses | 489 | 485 | 1,447 | 1,535 | |
(Loss) income from operations | (107) | 2 | (312) | (270) | |
(Loss) income before income taxes | (107) | 2 | (312) | (270) | |
Amortization of intangibles | 45 | 136 | |||
Depreciation | 106 | 97 | 305 | 298 | |
Property, plant and equipment additions | 81 | 170 | 217 | 277 | |
Current assets | 1,704 | 2,861 | 1,704 | 2,861 | |
Current liabilities | 709 | 796 | 709 | 796 | |
Total assets | $ 3,190 | $ 4,370 | $ 3,190 | $ 4,370 |