Argan , Inc. (NYSE: NYSE:AGX), a leading provider of energy infrastructure solutions, has reported a significant revenue increase in its second fiscal quarter earnings call, with consolidated revenue growing by 61% to reach $227 million. The company's net income rose to $18 million, or $1.31 per diluted share, and EBITDA stood at $25 million.
A substantial project backlog, exceeding $1 billion, includes a strong focus on renewable energy projects valued at approximately $570 million. With a solid balance sheet boasting $485 million in cash and investments, net liquidity of $260 million, and no debt, Argan is well-positioned for future growth. The company also highlighted its expertise in constructing both traditional and renewable power facilities.
Key Takeaways
- Consolidated revenue for Q2 increased by 61% to $227 million.
- Net income reached $18 million, with earnings of $1.31 per diluted share.
- EBITDA stood at $25 million for the quarter.
- Project backlog exceeds $1 billion, with significant contributions from renewable projects.
- The balance sheet remains robust with $485 million in cash and investments, and no debt.
- The company returned $101.6 million to shareholders and increased its quarterly dividend.
Company Outlook
- The company anticipates having multiple gas power plants under contract in the next 5 to 10 months.
- Argan expects a slight dip in TRC's backlog in the upcoming quarters due to high revenue generation.
- TRC is positioned for growth, particularly in the gas sector.
- Completion of some solar battery projects is expected by the end of the fiscal year.
Bearish Highlights
- The company saw a decline in gross profit due to changes in project mix.
- There is unpredictability in future project awards.
Bullish Highlights
- Gross profit percentage was at 16.8% for Q2.
- The company has increased its quarterly dividend, signaling confidence in its financial health.
- TRC business had a record quarter, generating over $170 million in revenue over the last 12 months.
Misses
- No specific misses were discussed in the earnings call.
Q&A Highlights
- The Kilroot situation had minimal impact in Q2, with the company pursuing claims worth over $25 million.
- The company is optimistic about the pipeline in the gas sector and potential for long-term revenue growth.
- Progress is being made on milestones for gas projects, including permits and land acquisition.
In conclusion, Argan, Inc. has demonstrated a strong financial performance in the second quarter of fiscal 2025, with significant growth in revenue and net income. The company's focus on expanding its presence in the gas and renewable energy sectors, alongside a robust balance sheet, positions it favorably for future endeavors. Despite some uncertainties in project awards, the company's outlook remains positive, supported by a healthy project backlog and strategic growth initiatives.
InvestingPro Insights
Argan, Inc. (NYSE: AGX) has shown a remarkable performance in its latest quarterly earnings, which aligns with several insights from InvestingPro. With a market capitalization of $953.23 million, the company's valuation appears to be in a strong position, especially when considering its recent revenue growth. In the last twelve months leading up to Q2 2025, Argan experienced a substantial revenue increase of 48.03%, underlining the company's successful expansion in its sector.
InvestingPro Tips indicate that analysts are optimistic about Argan's future, with sales growth expected in the current year and two analysts having revised their earnings upwards for the upcoming period. This confidence is reflected in the company's P/E ratio, which stands at a relatively modest 22.35, suggesting that the stock may be trading at a reasonable price relative to near-term earnings growth.
Moreover, Argan's financial health is bolstered by its cash position, as it holds more cash than debt, providing a cushion for operational flexibility and potential growth opportunities. The company also prides itself on maintaining dividend payments for 14 consecutive years, with a recent dividend yield of 1.68%, showcasing its commitment to returning value to shareholders.
For readers interested in a deeper dive into Argan's financials and future prospects, InvestingPro features additional tips and metrics, with 12 more InvestingPro Tips available that can provide further context to the company's performance and outlook.
InvestingPro Data Metrics:
- Market Cap (Adjusted): $953.23M USD
- P/E Ratio: 22.35
- Revenue Growth (Last Twelve Months as of Q2 2025): 48.03%
Argan's strategic focus on renewable energy projects and its robust financial position, exemplified by its impressive revenue growth and sound valuation metrics, suggest that the company is well-equipped to navigate the dynamic energy infrastructure landscape. These insights from InvestingPro offer a valuable perspective for investors considering Argan's stock in their portfolio.
Full transcript - Argan (AGX) Q2 2025:
Operator: Good evening, ladies and gentlemen, and welcome to the Argan, Inc. Earnings Release Conference Call for the Second Fiscal Quarter Ended July 31, 2024. This call is being recorded. All participants have been placed on a listen-only mode. Following management's remarks, the call will be open for questions. There is a slide presentation that accompanies today's remarks, which can be accessed via the webcast. At this time, it is my pleasure to turn the floor over to your host for today, Jennifer Belodeau, of IMS Investor Relations. Please go ahead, Ma'am.
Jennifer Belodeau: Thank you. Good evening, and welcome to our conference call to discuss Argan's results for the second fiscal quarter ended July 31, 2024. On the call today we have David Watson, Chief Executive Officer; and Hank Deily, Chief Financial Officer. I will take a moment to read the Safe Harbor statement. Statements made during this conference call and presented in the presentation that are not based on historical facts are forward-looking statements. Such statements include but are not limited to projections or statements of future goals and targets regarding the company's revenues and profits. These statements are subject to known and unknown factors and risks. The company's actual results, performance or achievements may differ materially from those expressed or implied by these forward-looking statements and some of the factors and risks that could cause or contribute to such material differences have been described in this afternoon's press release and in Argan's filings with the US Securities and Exchange Commission. These statements are based on information and understandings that are believed to be accurate as of today and we do not undertake any duty to update such forward-looking statements. Earlier this afternoon, the company issued a press release announcing its second quarter fiscal 2025 financial results and filed its corresponding Form 10-Q report with the Securities and Exchange Commission. Okay. I will now turn the call over to David Watson, CEO of Argan. Go ahead, David.
David Watson: Thanks, Jennifer, and thank you, everyone for joining today. I'll start by reviewing some of the highlights of our operations and activities and Hank Deily, our CFO will go over our financial results for the second fiscal quarter ended July 31, 2024. Then we'll open up the call for a brief Q&A. But before we jump into the call, as many of you already know, today will be Hank's last time taking us through the financials as he is set to retire in just a few weeks. Hank has had a distinguished 40-year career as a Senior Finance Executive and has been with Argan for the past 17 years, so I think we can all agree that his retirement is well earned. So, on behalf of all of us here at Argan, I'd like to thank Hank for his many contributions and his counsel reduced role to ensure a successful transition. Josh Baugher, who has worked directly with Hank and myself for the [indiscernible], Josh has nearly 20 years experience in strategic financial positions and he joined Argan a few years ago from Charles River Associates, a NASDAQ traded international consulting firm. He has been a valuable member of our finance team and we're pleased to have him take this leadership role. So now on to the operational review of our fiscal 2025 second quarter. We drove continued momentum in the second quarter achieving consolidated revenues growth of 61% to $227 million, significantly enhanced profitability with net income of $18 million or $1.31 per diluted share, and EBITDA of $25 million. Both our quarterly revenues and EBITDA performances were the strongest we've seen since 2017. Notably, we achieved revenue growth in all of our business segments this quarter, highlighted by a 65% increase in revenues from Power Services and a 52% increase in revenues from Industrial Services. Project backlog at the close of the second quarter was over $1 billion and included approximately $570 million in renewable projects. Additionally, our balance sheet reflected $485 million of cash and investments, net liquidity of $260 million, and no debt at July 31, 2024. Now on to the operational review. Slides 4 and 5 present our three reportable business segments. Power Industry Services is comprised of our Gemma Power Systems and Atlantic Projects Company operating units, which focus on the construction of multiple types of power facilities, including efficient gas-fired power plants, solar energy fields, biomass facilities, and wind farms. Power Industry Services revenues increased 65% to $173.8 million for the current quarter as compared to $105.3 million for the second quarter of fiscal 2024. The segment represented 77% of our second quarter revenues and reported pre-tax book income of $21 million. Industrial Construction Services, which is represented by TRC, had another significantly strong quarter with a revenues contribution of $49.6 million, or 22% of our second quarter consolidated revenues, and pre-tax book income of $4 million. These numbers represent revenues growth of 52% and a pre-tax book income increase of 38% compared to the second quarter of fiscal 2024. TRC can primarily provide solutions for industrial construction projects with a concentration in agriculture, petrochemical, pulp and paper, water and power, and has seen a great deal of market interest for their capabilities as a project partner, as many companies onshore or expand their U.S. manufacturing operations. TRC has a strong footprint in the southeast region of the U.S., which is a notably high-growth region for its focus industries. Finally, we have our Telecommunications Infrastructure Services Group, our smallest segment, which contributed 2% of our second quarter revenues. SMC Infrastructure Solutions is our operating brand in this segment, providing outside construction services for the utility and telecommunications sectors, as well as inside the premises wiring services, primarily for federal government locations, and military installations requiring high-level security clearance. As we've noted, during the past several quarters, energy demand is expected to grow significantly over the coming years. The heightened demand stems from the growing number of data centers coming online, as well as greater manufacturing activity related to the on-shoring of semiconductor and battery and solar panel production, among other factors. All of these enterprises require reliable and high-quality power 24/7 in order to preserve operational security and efficiency. Additionally, as more drivers shift to electric vehicles, it's anticipated that more homes and public venues will install the EV chargers necessary to keep those cars on the road. With these considerations in mind, it's widely acknowledged that energy infrastructure worldwide needs to be expanded and strengthened to meet anticipated increased capacity demands. Argan is energy agnostic, and while we are committed to assisting the transition to renewable power resources, we, along with the majority of the power industry, recognize that new traditional energy facilities are needed to support stable grids and reliable power generation. With our proven track record and capabilities related to the construction and management of complex power facility projects for both traditional natural gas and renewable energy resources, we are ideally suited to support the build out of the consistent and dependable power resources that will be necessary moving forward. We're energized by the pipeline of opportunities we're seeing and look forward to working with both new and existing partners who recognize our expertise and diverse capabilities as a valued collaborator on the anticipated impending build out of power resources needed to meet the forecast of unprecedented demand. In addition to ensuring stable power grids, we strongly support the shift to cleaner and more reliable power sources. Renewable projects represented approximately $570 million of our $1 billion backlog at July 31, 2024, with 91% of our current project backlog now comprised of projects that support zero or low carbon emissions. While we're pleased to have diversified our backlog with robust representation for renewable projects, we expect gas-fired and other thermal power plants to remain the core of our business for many years to come, especially as the industry seeks to provide consistent and high-quality power sources. Now I'd like to provide some project updates. Gemma is at peak construction on the Trumbull Energy Center Project in Lordstown, Ohio, where we're providing EPC services for a 950-megawatt natural gas-fired power plant. Trumbull is a combined-cycle power station that will assist in fulfilling electricity needs as the region phases out several coal-fired plants. From start to finish, the project will entail design, procurement, construction, and commissioning. Trumbull is designed to be one of the cleanest and most efficient combined cycle gas turbine projects in the PJM market, and we expect to complete it early in calendar year 2026. As we've detailed on previous calls, we have three solar and battery projects underway in Illinois, all of which have received full notices to proceed with EPC activities. Just to recap, the three facilities will provide 160-megawatts of solar power plus 22-megawatt hours of battery storage capability. These projects are exciting opportunities for us to demonstrate our capabilities in the renewable energy space. We also recently received full notice to proceed on a utility-scale solar field in Illinois that will provide 405-megawatt of electrical power and will use pre-existing transmission and utility infrastructure from a nearby retired coal power plant. This major project represents the largest solar project to date for us and the continued expansion of our renewable business. This is an exciting time for us in the face of unprecedented energy demands. With our experience and reputation as a full-service construction partner of choice for both traditional and renewable power projects, Argan is extremely well positioned to address the growing number of opportunities in our business pipeline. With that, I'll turn the call over to Hank Deily to take us through the second quarter financials. Go ahead, Hank.
Hank Deily: Thanks, David, and good afternoon, everyone. On Slide 11, we present our consolidated statements of earnings for the second quarter of fiscal 2025. Second quarter revenues increased 61% to $227 million, reflecting an increase in revenues from all of our operating segments as compared to the second quarter of fiscal 2024. In the second quarter, our Power Industry Services segment achieved a 65% increase in revenues primarily related to increased quarterly construction activities for the Midwest Solar and Battery Projects, the Trumbull Energy Center, the 405-megawatt Midwest Solar Project, and the Louisiana LNG Facility. In our Industrial Construction Services segment, TRC achieved revenue growth of 52%, driven by increased field services activity. For the 3 months period ended July 31, 2024, Argan reported consolidated gross profit of approximately $31.1 million, which represented a gross profit percentage of approximately 13.7% and reflected positive contributions from all three reportable business segments. Consolidated gross profit for the comparative quarter ended July 31, 2023 was $23.7 million representing a gross profit percentage of 16.8%. The decline in the gross profit during the current period was primarily due to a change in the mix of projects and contract types. Selling, general and administrative expenses of $12.4 million for the second quarter of fiscal 2025, increased as compared to SG&A of $10.5 million for the comparable prior year period. But these expenses decreased as a percentage of revenues to 5.5% in the second quarter of fiscal 2025 as compared to 7.4% in the second quarter of fiscal 2024. Net income for the second quarter of fiscal 2025 was $18.2 million or $1.31 per diluted share compared to $12.8 million or $0.94 per diluted share for last year's comparable quarter. EBITDA, or earnings before interest, taxes, depreciation and amortization, for the quarter ended July 31, 2024 was $24.8 million compared to $17.9 million reported for the same period of last year. Net income for the first 6 months of fiscal 2025 was $26.1 million or $1.90 per diluted share compared to $14.9 million or $1.10 per diluted share for the first 6 months of last fiscal year. And EBITDA was $36.7 million for the 6 months ended July 31, 2024 compared with EBITDA of $21.6 million for the first 6 months of fiscal 2024. With that, I'll turn the call back to David.
David Watson: Thanks, Hank. Turning to Slide 12, our consolidated project backlog exceeded $1 billion at July 31, 2024, and represented an increase of approximately 25% from the balance of project backlog at the close of the first quarter of fiscal 2025. Our backlog includes a healthy group of longer term, fully committed projects in both the power industry services and industrial service segments and, as mentioned earlier, approximately $570 million of the backlog is comprised of renewable projects. On Slide 13, we show certain major projects currently included in our project backlog. Earlier in the call, I mentioned our activity at the Trumbull Energy Center in Ohio. I also detailed the progress of three solar plus battery projects in Illinois, which have full notices to proceed and are full notice to proceed on a utility scale solar field in Illinois that will provide 405 megawatts of electrical power. During the quarter, as previously announced, we also entered into a full notice to proceed on a subcontract to install 5, 90-megawatt gas turbines to provide dedicated power to an LNG facility in Louisiana. This project, led by Gemma, will be a collaboration with TRC and APC and demonstrates our ability to bring comprehensive solutions to market quickly. Also included in our project backlog are two separate water treatment plant projects being performed by TRC. Over in Ireland, the three ESB FlexGen Peaker Power Plants and the Shannonbridge Thermal Plants are both in the final stages of those projects. As I mentioned, the growing urgency of power grid operators in this country to ensure that we have the infrastructure in place to meet the forecasted growth in energy demand is hastening the number of new projects coming to market. Our backlog represents a diverse group of projects that reflect our wide-ranging operational capabilities and highlight the market recognition of our leadership role as an effective and reliable industry partner. Our balance sheet remained strong. At July 31, 2024, we had approximately $485 million in cash, cash equivalents, and investments generating meaningful investment yields. Our net liquidity was $260 million, and we had no debt. Stockholders' equity was $308 million at July 31, 2024. This liquidity bridge demonstrates that our business model ordinarily requires a low-level capital expenditures. Our net liquidity of $259.8 million at July 31, 2024 has increased $14.9 million compared with net liquidity at January 31, 2024. Since November 2021, we have returned a total of approximately $101.6 million to shareholders, as we've repurchased approximately 2.7 million shares of our common stock, or approximately 17% of shares outstanding at the beginning of the program, at an average price of $37.67 per share. Additionally, in September 2023, we increased the company's quarterly dividend 20% from $0.25 to $0.30 per share, reflecting the strength of our business and increasing our annual run rate to $1.20 per share. Our company is dedicated to driving long-term value creation for shareholders. While our operating results can vary from quarter-to-quarter related to the timing of contracts, we remain focused on delivering long-term value to shareholders. Since 2008, we have increased our tangible book value and cumulative dividends per share considerably. We are excited about what the future holds for Argan, and we are committed to growing our leadership role as a trusted construction partner for all types of energy facilities. We have a long history of proven success with both traditional gas-fired as well as renewable projects, providing us a competitive advantage as existing and potential customers look to identify the best partner to help them build reliable energy resources in the face of unprecedented demand. For a data point, the Wall Street Journal recently reported that as of May, there were 133 natural gas-fired power plants under development in the United States according to S&P Global Commodity Insights. As recent forecasts project an 18% increase in natural gas fire power generation between now and 2035. We believe we have a good reason to be optimistic about the continued demand for our services. As we move through the balance of fiscal 2025, we are focused on winning the complex design and construction projects best suited to our capabilities that will add much-needed liability and energy security to an already strained power grid. To close, we remain focused on our long-term growth strategy, leverage our core competencies to capitalize on existing and emerging market opportunities, maintain disciplined risk management with the goal of improving our project management effectiveness and minimizing costly project overruns. To strengthen our position as a partner of choice in the construction of low and net zero emission power generation facilities as the industry transitions to cleaner energy alternatives while maintaining grid reliability. And last but not least, drive organic growth while also being alert for acquisition opportunities that make sense for our business through thoughtful capital allocation. We're pleased with our progress to the first half of 2025, which has built a strong foundation for our continued success. We are focused on expanding our reach as a partner of choice to customers in traditional natural gas fired and renewable power industries, as well as growing our customer base in the industrial segment of our business. I'd like to thank our employees for their dedication to executing each job on time and on budget and to thank our shareholders for their continued support. With that, operator, let's open it up for questions.
Operator: [Operator Instructions] The first question comes from Chris Moore with CJS Securities. Please proceed.
Chris Moore: Hey, good afternoon guys. Congratulations on a terrific quarter and congratulations to Hank. Sounds exciting.
David Watson: Thank you.
Chris Moore: All right. Let me …
Hank Deily: Thank you, Chris.
Chris Moore: … start, certainly, start with you had referenced the 133 natural gas projects. We talked a little bit about that last quarter. It sounds like there are kind of two primary challenges. One is turbine demand is currently outstripping supply, and perhaps the bigger one is the interconnect agreements. Can you talk a little bit about those two and kind of what you’re seeing at this point.
David Watson: Yes, sure. The interconnection agreements continue to be a headwind, but what folks are really doing now is you're seeing a lot of developments that are moving ahead with what they call behind the meter power generating assets. And a number of the projects that we're targeting are just that, behind the meter power generating assets that ultimately do want to be connected to the grid, but given the timeline on being able to do that, it can stretch out many years, longer than folks want to get ready now. So, that is a known issue. It's a known issue not just for natural gas, but also for renewables, and something that the grid operators are working feverishly trying to remedy with various efforts. But the show must go on and folks are planning to build with or without interconnection agreements from here and there. As it relates to the turbine manufacturing limitations, that's correct. AI is a global phenomenon. Power use is up across the globe, not just in the U.S. And so the turbine manufacturers, notably GE, Siemens, and Mitsubishi, are flat out right now. And they are obviously trying to increase their capacity, but it is something where folks are having to make commitments early in the process to, in a way, get a place in line to get a turbine. And those who do have a place in line to get a turbine, they are clearly -- can move their development forward quicker than others. So it's -- both of these items are headwinds, which is few and far between given all the tailwinds in our space.
Chris Moore: Absolutely. Backlog a $1 billion, $570 million of that renewable, I think your record backlog was maybe $1.4 billion 10 years ago or so. So maybe two questions there. Is there such thing as a kind of an optimal backlog level that you think about and what would be that optimal mix between natural gas and renewables?
David Watson: Well, the optimal backlog amount, and I'll tell all of my teams and the guys and gals that are making all the -- doing all the hard work to cover their ears, is it's got to be in the multiple of billions of dollars from my perspective. That being said, obviously there are operational capacity considerations, and while I believe we have expanded that and can work on 10 plus jobs at any given time, both gas and renewable, it is something to always be mindful of. But as it relates to the mix of the backlog, to me, it really just depends on where we are in the market. I think historically we have been a builder of a gas-fired power plant, and that is our sweet spot, but clearly we have grown our renewable business and hope to have that sustainably as a big piece of our business on a go-forward basis. What does that mix look like? I don't really have one, Chris, except that typically would be north of 50% for gas and south of that for renewables. And don't forget about our industrial business as well, which is significant as well.
Chris Moore: Got it. That's helpful. Just on the gas side, what's the likelihood of closing, beginning work on a relatively large natural gas project calendar in 2025. I was just trying to get a sense, as I know you had talked about some at the end of Q4. Any further thoughts there on how those projects are progressing?
David Watson: Yes, so we just got above a $1 billion in backlog and you're already asking for more, Chris.
Chris Moore: I was. Natural gas, exactly.
David Watson: Understood. So, yes, we do continue to have visibility. We clearly are in a strong market and given our capabilities around natural gas builds. So, given the support that we're seeing, say, in ERCOT with the Texas Energy Fund, given the support that we're seeing actually in the PJM with the strong capacity price signal that was just sent out, which was about 270 per megawatt, which is a 900% increase from the last one. So there is a lot of positive data points out there that support natural gas build outs. And I know we already talked about some of those headwinds earlier on this call. But for us, we do expect to have multiple gas power plants under contract working on generating revenue over the next 5 to 10 months.
Chris Moore: Got it. Last one for me. Anything worth mentioning on Kilroot situation at this point in time.
David Watson: Well, I mean, it had very minimal P&L impact during Q2 since the operational phase has concluded. As you know, we have a $12.8 million loss on the project, which is significant and disappointing, but we consider all things and make our best efforts to get to. At the end of the day, not a whole lot to add there. We are going to continue to vigorously go after our claims, which are in excess of $25 million, and continue to pursue all the rights under the contract.
Chris Moore: Sounds good. I'll leave it there. Thanks, guys.
David Watson: Absolutely.
Operator: [Operator Instructions] The next question comes from Rob Brown with Lake Street Capital. Please proceed.
Rob Brown: Hi. Good afternoon and congratulations on the progress.
David Watson: Thanks, Rob.
Rob Brown: Just sort of following up on the TRC business, it was very strong this quarter. Could you give us a sense of sort of how that business is, the environment is there and what the opportunity pipeline is in that market?
David Watson: Yes, absolutely. And it was a record quarter, and I guess I really didn't stress that enough in the prepared remarks. I mean, revenues of almost $50 million in Q2, and Rob, they've generated over $170 million of revenue and over $16 million of EBITDA over the last 12 months. So it's just been a tremendous growth and success story. And with that, there has been a conversion of backlog to revenue. So TRC, I believe, is positioned with the right leadership team to grow. I do think that there might be a little bit of a slight dip over the next quarter or two in their backlog, given the amount of revenues that they're generating, and given my visibility and our visibility in the timing of future project awards, which you know is always difficult for us to predict, both for our industrial business as well as for our power business.
Rob Brown: Okay. So it sounds like it's a little hard to predict, but do you see a strengthening pipeline there [indiscernible] and the gas side?
David Watson: I do. I do. It's perfectly positioned in the Southeast. I guess I was talking a little bit to the very short-term nature of things, but from a long-term standpoint TRC should continue to generate this growth in their revenues, and we're really excited about that.
Rob Brown: Okay, great. And then on the solar battery projects that you have going now, could you remind us again on the timeline of those, how long those sort of burn off revenue, and how long does it take to complete, roughly?
David Watson: Yes, so there's three solar battery projects, and not all projects are in the same phase of construction, but we are -- a couple of the projects are targeted to be completed by the end of this fiscal year, and then one of them is a little bit after that. So the timing of those projects is, again, most of the solar jobs are pretty quick burns, and these are no exceptions.
Rob Brown: Okay, good. And then, I guess, looking back to your comments on the gas projects with multiple projects in the next sort of 5 to 10 months, I think you said, are those seeing some of these project delay issues that you talked about earlier, or are those really just going through their own process at about the timeline you expected?
David Watson: We're seeing them continue to check off all the milestone efforts in the developmental process, right, those are EPA air permits. Those are getting gas to the site. It's land acquisition, it's raising capital and a myriad of other things, including securing a turbine. So we do feel really good about the number of projects that we've been tracking and been working with potential customers on to be able to make the statement that we expect multiple projects over the next 5 to 10 months.
Rob Brown: Okay, great. Thank you. I'll turn it over.
David Watson: Excellent.
Operator: Okay. We have no further questions in queue. We've reached the end of the question-and-answer session. I will now turn the call back over to David Watson for closing remarks.
David Watson: Well, thank you all for participating in today's call. And, Hank, thank you for all that you have done for Argan. I have cherished working with you over the years. So thank you.
Hank Deily: Well, David, you're welcome. I thank Argan and the listeners out there are Argan. I thank them for giving me this opportunity to work for almost 17 years doing what I love to do. This has been a great opportunity for me. One of the best things that ever happened to me in my professional career Is having the opportunity to work with David. He's taught me or did teach me much and it's been a great ride. So thank you for the opportunity and good luck to Argan going forward and I'll be around.
David Watson: Thanks, Hank. With that, we look forward to speaking with you again when we report our third quarter fiscal 2025 results and have a great evening everybody.
Operator: Thank you. This concludes today's conference and you may disconnect your lines at this time. Thank you for your participation.
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