Argan, Inc. Reports Diluted EPS of $0.19 for the Third Quarter; Backlog Exceeds $505 Million

Argan, Inc. Reports Diluted EPS of $0.19 for the Third Quarter; Backlog Exceeds $505 Million

ROCKVILLE, Md.--December 12,2008 Argan, Inc. (NYSE Alternext U.S.: AGX) today announced financial results for the three and nine months ended October 31, 2008.

For the nine months ended October 31, 2008, net revenues were $164.9 million compared to $152.8 million in the nine months ended October 31, 2007. Gemma contributed $151.0 million, or 91.6% of total revenues, in the first nine months of fiscal 2009 compared to $131.0 million, or 85.7% of total revenues in the first nine months of fiscal 2008. Combined revenues from Argan’s other wholly-owned subsidiaries decreased to $13.9 million, or 8.4% of total revenues in the first nine months of fiscal 2009 compared to $21.9 million, or 14.3% of total revenues in the first nine months of fiscal 2008. Net income for the first nine months ended October 31, 2008 was $5.0 million, or $0.40 per fully diluted share based on 12,480,000 fully diluted shares outstanding compared to a net loss of $2.6 million or ($0.24) per fully diluted share based on 11,095,000 fully diluted shares outstanding for the first nine months ended October 31, 2007.

Net revenues for the three months ended October 31, 2008 were $41.4 million compared to $49.3 million for the three months ended October 31, 2007. Argan’s wholly-owned subsidiary, Gemma Power Systems (Gemma), contributed $36.4 million, or 87.9% of total revenues, for the quarter ended October 31, 2008 compared to $42.0 million, or 85.3% of total revenues, for the quarter ended October 31, 2007. Combined revenues for the quarter ended October 31, 2008 at Argan’s other wholly-owned subsidiaries decreased to $5.0 million or 12.1% of total revenues from $7.2 million, or 14.7% of total revenues, in the quarter ended October 31, 2007. Net income for the third quarter ended October 31, 2008 was $2.6 million, or $0.19 per fully diluted share based on 13,730,000 fully diluted shares outstanding compared to a net loss of $2.0 million, or ($0.18) per fully diluted share based on 11,096,000 fully diluted shares outstanding in the quarter ended October 31, 2007.

The Company reported consolidated EBITDA (Earnings before interest, taxes, depreciation and amortization) of $13.3 million and $4.5 million, respectively, for the nine months and three months ended October 31, 2008.

On a segment basis, Gemma reported income before income taxes of $16 million for the nine months and $5.9 million for the three months ended October 31, 2008.

Argan had cash of $93.1 million and escrowed cash of $10.3 as of October 31, 2008. The Company’s backlog as of October 31, 2008 was $505 million.

Included in the backlog is Gemma’s engineering, procurement and construction agreement with Competitive Power Ventures (CPV), signed in October and valued at $211 million, to design and build eight simple cycle gas-fired peaking plants with a total power rating of 800 megawatts, to be located in southern California. Additionally in the three months ended October 31, 2008, Gemma received a full notice to proceed from Pacific Gas & Electric on the design and construction of a natural gas-fired power plant in Colusa, California. The Company previously announced that it had signed an engineering, procurement and construction agreement for the Colusa project.

Gemma’s backlog does not include projects associated with Gemma Renewable Power, its business partnership with Invenergy Wind Management. During the quarter, Gemma Renewable Power received an initial limited notice to proceed on a project with an estimated contract value of $50 million, to design and build the expansion of a wind farm in LaSalle County, Illinois.

Commenting on Argan’s results, Rainer Bosselmann, Chairman and Chief Executive Officer stated, “We achieved strong EBITDA margin and improved net income year-to-date and for the quarter. Gemma continues to perform very well and benefits from its reputation as a leading designer and builder of power plants. Year-to-date revenue at Gemma increased 15% and year-to-date pretax income increased by 147%. During the quarter, Gemma was successfully completing the final phases of several renewable energy projects and was in the early stages of two substantial traditional power projects.”

Mr. Bosselmann concluded, “In addition to Gemma’s strong existing backlog, we are encouraged by potential opportunities for the design and construction of wind farms through Gemma Renewable Power, our joint venture with Invenergy. Gemma has been very successful in the design and construction of traditional energy plants and we believe that expertise will translate well to the efficient design and development of wind energy facilities.”
About Argan, Inc.
Argan’s primary business is designing and building energy plants through its Gemma Power Systems subsidiary. These energy plants include traditional gas as well as alternative energy including biodiesel, ethanol, and renewable energy sources such as wind power and solar. Argan also owns Southern Maryland Cable, Inc. and Vitarich Laboratories, Inc.
Certain matters discussed in this press release may constitute forward-looking statements within the meaning of the federal securities laws and are subject to risks and uncertainties including, but not limited to; (1) the Company’s ability to achieve its business strategy while effectively managing costs and expenses; (2) the Company’s ability to successfully and profitably integrate acquisitions; and (3) the continued strong performance of the energy sector. Actual results and the timing of certain events could differ materially from those projected in or contemplated by the forward-looking statements due to a number of factors detailed from time to time in Argan’s filings with the Securities and Exchange Commission. In addition, reference is hereby made to cautionary statements with respect to risk factors set forth in the Company’s most recent reports on Form 10-K and 10-Q, and other SEC filings.


Contacts Argan, Inc.Rainer Bosselmann/Arthur Trudel301-315-0027orInvestor Relations:Institutional Marketing Services (IMS)John Nesbett/Jennifer Belodeau203-972-9200


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