Argan Inc (NYSE: AGX)

Argan Inc., referred to as AGX, operates in the construction and engineering services industry, with a focus on power industry services, industrial construction services, and telecommunications infrastructure services. The company's primary business activities involve providing engineering, procurement, construction, commissioning, maintenance, project development, and technical consulting services to a diverse range of clients. Argan's operations span across various countries, with a significant presence in the United States, Ireland, and the United Kingdom.

The power industry services segment is the largest contributor to Argan's revenue, accounting for approximately 78% of consolidated revenues in the fiscal year ended January 31, 2022. This segment serves independent power project owners, public utilities, power plant heavy equipment suppliers, and other commercial firms with significant power requirements. Argan's subsidiaries in this segment, Gemma Power Systems, LLC (GPS) and Atlantic Projects Company Limited and affiliates (APC), provide specialized services in the renewable energy sector. GPS offers full-service engineering, procurement, and construction (EPC) services for alternative energy facilities, while APC specializes in turbine, boiler, and large rotating equipment engineering, procurement, installation, commissioning, and outage services for power plants in Ireland and the UK.

The industrial construction services segment, operated by The Roberts Company, Inc. (TRC), provides field services and project management for new plant construction, additions, maintenance turnarounds, shutdowns, and emergency mobilizations for industrial plants primarily located in the Southeast region of the US. TRC's major customers include Nutrien Ltd., Jacobs Solutions Inc., and various other industrial companies.

The telecommunications infrastructure services segment, operated by Southern Maryland Cable, Inc. (SMC), 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. SMC's major customers include Southern Maryland Electric Cooperative, counties and municipalities in Maryland, and technology-oriented government contracting firms in the Washington, D.C. metropolitan area.

Argan competes with large and well-capitalized private and public firms in the construction and engineering services industry, including global businesses. The company's competitive advantages include its proven track record as a value-add choice for the design, build, and commissioning of natural gas-fired and alternative energy power systems, its ability to react quickly to customer requirements, and its strong, experienced teams that deliver results.

Argan's most significant customer relationships include three power industry services customers, which accounted for approximately 15% of consolidated revenues for the fiscal year ended January 31, 2022. For the industrial construction services segment, TRC's major customers include Nutrien Ltd., Jacobs Solutions Inc., and various other industrial companies. For the telecommunications infrastructure services segment, SMC's major customers include Southern Maryland Electric Cooperative, counties and municipalities in Maryland, and technology-oriented government contracting firms in the Washington, D.C. metropolitan area.

In terms of brand names and trade names, Argan's power industry services segment includes Gemma Power Systems and Atlantic Projects Company. The industrial construction services segment operates under The Roberts Company, while the telecommunications infrastructure services segment operates under Southern Maryland Cable. These subsidiaries and their services are integral to Argan's operations and competitive positioning in the construction and engineering services industry.