Argan, Inc. (AGX) has reported a 67.23 percent jump in profit for the quarter ended Oct. 31, 2016. The company has earned $18.07 million, or $1.16 a share in the quarter, compared with $10.81 million, or $0.72 a share for the same period last year.
Revenue during the quarter surged 53.94 percent to $175.44 million from $113.97 million in the previous year period. Gross margin for the quarter contracted 219 basis points over the previous year period to 20.85 percent. Total expenses were 84.76 percent of quarterly revenues, up from 81.86 percent for the same period last year. That has resulted in a contraction of 290 basis points in operating margin to 15.24 percent.
Operating income for the quarter was $26.73 million, compared with $20.67 million in the previous year period.
Commenting on Argan's third quarter results, Rainer Bosselmann, Chairman and Chief Executive Officer, stated, "We were pleased to follow up our record second quarter with our next best quarter in Company history. These sustained results could not have been achieved without the operational excellence of our employees. Their dedication to finish out projects while simultaneously ramping up on four large, gas-fired plants allowed us to post strong current quarter results and to pay our largest dividend to date - $1.00 per share. Even though we did not add any major projects to our backlog over the last several quarters, it remains over $1.1 billion and we expect continued growth in our revenues the rest of this year and into the next."
Working capital increases
Argan, Inc. has recorded an increase in the working capital over the last year. It stood at $209.44 million as at Oct. 31, 2016, up 13.80 percent or $25.40 million from $184.03 million on Oct. 31, 2015. Current ratio was at 1.72 as on Oct. 31, 2016, down from 2.22 on Oct. 31, 2015.
Days sales outstanding went down to 23 days for the quarter compared with 38 days for the same period last year.
At the same time, days payable outstanding went up to 41 days for the quarter from 35 for the same period last year.
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