8-K

December 8, 2014 – ROCKVILLE, MD – Argan, Inc. (NYSE: AGX) today announced financial results for the three and nine months ended October 31, 2014.

For the quarter ended October 31, 2014, revenues were $127.6 million compared to $63.5 million for the quarter ended October 31, 2013. Gemma Power Systems LLC and affiliates (Gemma) contributed $125.7 million, or 99% of revenues in the third quarter of fiscal 2015, compared to $61.1 million, or 96% of revenues in the third quarter of fiscal 2014.

For the nine months ended October 31, 2014, revenues were $280.8 million compared to $168.0 million during the nine months ended October 31, 2013. Gemma contributed $275.9 million, or 98% of revenues in the first nine months of fiscal 2015, compared to $160.4 million, or 95% of revenues in the first nine months of fiscal 2014.

Argan reported consolidated EBITDA (Earnings before interest, taxes, depreciation and amortization) attributable to the stockholders of Argan, Inc. of $20.9 million for the quarter ended October 31, 2014 compared to $20.3 million for the same prior year period. Gemma recorded $22.3 million in EBITDA for the third quarter of fiscal 2015 compared to $21.2 million for the third quarter of fiscal 2014. Argan reported EBITDA attributable to the stockholders of Argan, Inc. of $40.3 million for the nine months ended October 31, 2014 compared to $50.5 million for the same prior year period. Gemma, for its segment, recorded $44.3 million in EBITDA for the first nine months of fiscal 2015 compared to $51.9 million for the first nine months of fiscal 2014.

In the third quarter of fiscal 2015, the Company reported income before income taxes of $24.9 million compared to income before income taxes of $20.6 million in the third quarter of fiscal 2014.

For the first nine months of fiscal 2015, the Company reported income before income taxes of $48.8 million compared to income before income taxes of $52.8 million for the first nine months of fiscal 2014.

Net income attributable to the stockholders of Argan for the quarter ended October 31, 2014 was $12.4 million, or $0.84 per diluted share based on 14,795,000 diluted shares outstanding, compared to net income attributable to the stockholders of Argan of $11.9 million, or $0.83 per diluted share based on 14,365,000 diluted shares outstanding, for the quarter ended October 31, 2013.

Net income attributable to the stockholders of Argan for the nine months ended October 31, 2014 was $24.4 million, or $1.66 per diluted share based on 14,761,000 diluted shares outstanding, compared to net income attributable to the stockholders of Argan of $31.0 million, or $2.16 per diluted share based on 14,302,000 diluted shares outstanding, for the nine months ended October 31, 2013.

Argan had consolidated cash of $361.0 million as of October 31, 2014 and was debt free. Consolidated working capital increased during the current fiscal year to date to approximately $162.0 million as of October 31, 2014 and consolidated tangible net worth increased to $156.6 million in the same period.

Gemma’s backlog as of October 31, 2014 was $520 million compared to $832 million as of October 31, 2013. The October 31, 2014 backlog includes primarily the combined cycle gas fired power plants for Panda Liberty and Panda Patriot.

Commenting on Argan’s financial results, Rainer Bosselmann, Chairman and Chief Executive Officer stated, “We are pleased with the operational performance of Gemma which is in the middle of constructing the Panda Liberty and Panda Patriot power plants. In comparing both the fiscal 2015 third quarter and year to date results to the same periods in the prior year, Gemma has excelled in construction activities in the current year while last fiscal year results included substantial development fees which are not recurring in fiscal 2015.”

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. Argan also owns Southern Maryland Cable, 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.


ARGAN, INC. AND SUBSIDIARIES Reconciliations to EBITDA Consolidated Operations (Unaudited)

	Three Months Ended October 31,

	2014			2013
Net income	$	16,759,000		$	12,449,000
Less income attributable to noncontrolling interests		(4,337,000	)		(521,000	)
Interest expense		--			--
Income tax expense		8,259,000			8,143,000
Depreciation		140,000			142,000
Amortization of purchased intangible assets		61,000			61,000

EBITDA attributable to the stockholders of Argan, Inc.	$	20,882,000		$	20,274,000


Reconciliations to EBITDA Power Industry Services (Unaudited)

	Three Months Ended October 31,

	2014			2013
Income before income taxes	$	26,409,000		$	21,537,000
Less pre-tax income attributable to noncontrolling interests		(4,258,000	)		(521,000	)
Interest expense		--			--
Depreciation		94,000			96,000
Amortization of purchased intangible assets		61,000			61,000

EBITDA attributable to the stockholders of Argan, Inc.	$	22,306,000		$	21,173,000


Reconciliations to EBITDA Consolidated Operations (Unaudited)

	Nine Months Ended October 31,

	2014			2013
Net income	$	33,580,000		$	33,312,000
Less income attributable to noncontrolling interests		(9,133,000	)		(2,351,000	)
Interest expense		--			(161,000	)
Income tax expense		15,256,000			19,100,000
Depreciation		423,000			407,000
Amortization of purchased intangible assets		182,000			182,000

EBITDA attributable to the stockholders of Argan, Inc.	$	40,308,000		$	50,489,000


Reconciliations to EBITDA Power Industry Services (Unaudited)

	Nine Months Ended October 31,

	2014			2013
Income before income taxes	$	52,846,000		$	54,345,000
Less pre-tax income attributable to noncontrolling interests		(9,054,000	)		(2,782,000	)
Interest expense		--			(161,000	)
Depreciation		286,000			268,000
Amortization of purchased intangible assets		182,000			182,000

EBITDA attributable to the stockholders of Argan, Inc.	$	44,260,000		$	51,852,000

Management uses EBITDA, a non-GAAP financial measure, for planning purposes, including the preparation of operating budgets and the determination of appropriate levels of operating and capital investments. Management believes that EBITDA provides additional insight for analysts and investors in evaluating the Company’s financial and operational performance and in assisting investors in comparing the Company’s financial performance to those of other companies in the Company’s industry. However, EBITDA is not intended to be an alternative to financial measures prepared in accordance with GAAP and should not be considered in isolation from the Company’s GAAP results of operations. Pursuant to the requirements of SEC Regulation G, reconciliations between the Company’s GAAP and non-GAAP financial results are included in the presentations above and investors are advised to carefully review and consider this information as well as the GAAP financial results that are presented in the Company’s SEC filings.

Note 1 – The condensed consolidated balance sheet as of January 31, 2014 has been derived from audited consolidated financial statements.


One Church Street, Suite 201, Rockville, MD				20850
(Address of Principal Executive Offices)				(Zip Code)


Exhibit No.		Description

99.1		Argan, Inc., Press Release, issued December 8, 2014.


	ARGAN, INC.

Date: December 10, 2014		By: /s/ Arthur F. Trudel

			Arthur F. Trudel
			Senior Vice President and
			Chief Financial Officer


Exhibit No.		Description

99.1		Argan, Inc., Press Release, issued December 8, 2014.


Company Contact:		Investor Relations Contact:
Rainer Bosselmann		Arthur Trudel
301.315.0027		301.315.9467


	October 31, 2014		January 31, 2014
ASSETS	(Unaudited)		(Note 1)

CURRENT ASSETS
Cash and cash equivalents	$	361,021,000	$	272,209,000
Accounts receivable, net of allowance for doubtful accounts		22,905,000		23,687,000
Costs and estimated earnings in excess of billings		314,000		527,000
Prepaid expenses		1,977,000		1,754,000
Notes receivable and accrued interest		1,711,000		204,000
Deferred income tax assets		517,000		178,000

TOTAL CURRENT ASSETS		388,445,000		298,559,000
Property, plant and equipment, net of accumulated depreciation (including $1,617,000 in costs related to a variable interest entity as of October 31, 2014)		5,551,000		4,183,000
Goodwill		18,476,000		18,476,000
Intangible assets, net of accumulated amortization		1,906,000		2,088,000

TOTAL ASSETS	$	414,378,000	$	323,306,000


LIABILITIES AND STOCKHOLDERS’ EQUITY

CURRENT LIABILITIES
Accounts payable	$	44,941,000	$	22,589,000
Dividends payable		10,166,000		--
Accrued expenses		15,228,000		7,912,000
Billings in excess of costs and estimated earnings		156,159,000		134,736,000

TOTAL CURRENT LIABILITIES		226,494,000		165,237,000
Deferred income tax liabilities		295,000		292,000

TOTAL LIABILITIES		226,789,000		165,529,000


COMMITMENTS AND CONTINGENCIES

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; 14,532,434 and 14,289,134 shares issued at October 31 and January 31, 2014, respectively; 14,529,201 and 14,285,901 shares outstanding at October 31 and January 31, 2014, respectively		2,180,000		2,143,000
Additional paid-in capital		107,223,000		100,863,000
Retained earnings		67,616,000		53,335,000
Treasury stock at cost – 3,233 shares at October 31 and January 31, 2014		(33,000)		(33,000)

TOTAL STOCKHOLDERS’ EQUITY		176,986,000		156,308,000
Noncontrolling interests		10,603,000		1,469,000

TOTAL EQUITY		187,589,000		157,777,000

TOTAL LIABILITIES AND EQUITY	$	414,378,000	$	323,306,000


	Three Months Ended October 31,				Nine Months Ended October 31,

	2014		2013		2014		2013
REVENUES

Power industry services	$	125,660,000	$	61,103,000	$	275,902,000	$	160,392,000
Telecommunications infrastructure services		1,904,000		2,349,000		4,883,000		7,572,000

Revenues		127,564,000		63,452,000		280,785,000		167,964,000

COST OF REVENUES
Power industry services		95,863,000		38,012,000		215,174,000		104,062,000
Telecommunications infrastructure services		1,388,000		1,564,000		3,684,000		5,741,000

Cost of revenues		97,251,000		39,576,000		218,858,000		109,803,000

GROSS PROFIT		30,313,000		23,876,000		61,927,000		58,161,000
Selling, general and administrative expenses		5,473,000		3,545,000		13,332,000		8,589,000

INCOME FROM OPERATIONS		24,840,000		20,331,000		48,595,000		49,572,000
Gains on the deconsolidation of variable interest entities		--		--		--		2,444,000
Other income, net		99,000		261,000		162,000		827,000

INCOME BEFORE INCOME TAXES		24,939,000		20,592,000		48,757,000		52,843,000
Income tax expense		8,180,000		8,143,000		15,177,000		19,531,000

NET INCOME		16,759,000		12,449,000		33,580,000		33,312,000
NET INCOME ATTRIBUTABLE TO NONCONTROLLING INTERESTS		4,337,000		521,000		9,133,000		2,351,000


NET INCOME ATTRIBUTABLE TO THE STOCKHOLDERS OF ARGAN, INC.	$	12,422,000	$	11,928,000	$	24,447,000	$	30,961,000


EARNINGS PER SHARE ATTRIBUTABLE TO THE STOCKHOLDERS OF ARGAN, INC.
Basic	$	0.86	$	0.85	$	1.70	$	2.21

Diluted	$	0.84	$	0.83	$	1.66	$	2.16