Argan (AGX) 8-K Argan, Inc. Reports Fourth Quarter and Year End Results

Exhibit 99.1

ARGAN, INC. REPORTS FOURTH QUARTER AND YEAR END RESULTS

April 8, 2014 – ROCKVILLE, MD –Argan, Inc. (NYSE: AGX) today announced financial results for the three months and fiscal year ended January 31, 2014.

For the year ended January 31, 2014, revenues were $227.5 million compared to $278.6 million for the year ended January 31, 2013. Gemma Power Systems LLC and affiliates (Gemma) contributed $218.6 million, or 96% of revenues in fiscal 2014, compared to $261.3 million, or 94% of revenues in fiscal 2013.

Argan reported consolidated EBITDA (Earnings before interest, taxes, depreciation and amortization) attributable to the stockholders of Argan, Inc. of $66.3 million for the year ended January 31, 2014 compared to $37.7 million for the prior fiscal year. Gemma recorded $69.5 million in EBITDA attributable to the stockholders of Argan, Inc. for fiscal 2014 compared to $40.2 million for fiscal 2013.

Income from continuing operations for fiscal 2014 was $43.3 million, compared to income from continuing operations for fiscal 2013 of $22.1 million.

Net income attributable to shareholders of Argan, Inc. for fiscal 2014 was $40.1 million, or $2.78 per diluted share based on 14,427,000 diluted shares outstanding, compared to $23.3 million, or $1.65 per diluted share based on 14,116,000 diluted shares outstanding for fiscal 2013.

For the three months ended January 31, 2014 consolidated revenues were $59.5 million compared to $57.8 million for the three months ended January 31, 2013. Gemma contributed $58.3 million or 98% of consolidated revenues for the fourth quarter of fiscal 2014, compared to $55.0 million, or 95% of consolidated revenues for the fourth quarter of fiscal 2013.

Argan reported consolidated EBITDA (Earnings before interest, taxes, depreciation and amortization) attributable to the stockholders of Argan, Inc. of $15.8 million for the three months ended January 31, 2014 compared to $10.4 million in the fourth quarter of last fiscal year. Gemma recorded $17.6 million in EBITDA attributable to the stockholders of Argan, Inc. for the three months ended January 31, 2014 compared to $11.6 million for the three months ended January 31, 2013.

Income from continuing operations for the three months ended January 31, 2014 was $10 million, compared to income from continuing operations of $5.9 million, for the fourth quarter of fiscal 2013.

For the three months ended January 31, 2014, Argan reported net income attributable to Argan, Inc. stockholders of $9.2 million, or $0.63 per diluted share based on 14,581,000 diluted shares outstanding, compared to net income of $6.6 million or $0.46 per diluted share based on 14,186,000 diluted shares outstanding for the fourth quarter of fiscal 2013.

Argan had consolidated cash of $272 million as of January 31, 2014. During the current fiscal year, Argan used cash of $10.6 million to pay for a $0.75 dividend per share of common stock. Consolidated working capital increased during the current fiscal year to approximately $133.3 million as of January 31, 2014 from approximately $88.6 million as of January 31, 2013. Consolidated tangible net worth increased to $135.7 million at January 31, 2014 from $100.1 million at January 31, 2013.

Gemma’s backlog as of January 31, 2014 was $790 million compared to $180 million as of January 31, 2013. The substantial increase in backlog is the result of Gemma entering into EPC agreements with affiliates of Panda Power Funds to design and to build two gas fired power plants.

Commenting on Argan’s financial results, Rainer Bosselmann, Chairman and Chief Executive Officer stated, “Gemma’s execution on projects in fiscal 2014 coupled with success fees earned for the development efforts of the Panda Liberty and Panda Patriot projects contributed to record earnings during fiscal 2014. We appreciate the dedicated efforts of our Gemma associates.”

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 and solar 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.

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

ARGAN, INC. AND SUBSIDIARIES

Consolidated Statements of Operations

	Three Months Ended January 31,					Years Ended January 31,
	2014		2013			2014		2013
	(Unaudited)
Revenues
Power industry services	$	58,257,000	$	54,963,000		$	218,649,000	$	261,327,000
Telecommunications infrastructure services		1,234,000		2,877,000			8,806,000		17,308,000
Revenues		59,491,000		57,840,000			227,455,000		278,635,000
Cost of revenues
Power industry services		37,745,000		41,478,000			141,807,000		214,817,000
Telecommunications infrastructure services		1,059,000		2,343,000			6,800,000		13,683,000
Cost of revenues		38,804,000		43,821,000			148,607,000		228,500,000
Gross profit		20,687,000		14,019,000			78,848,000		50,135,000
Selling, general and administrative expenses		4,329,000		4,245,000			12,918,000		14,350,000
Income from operations		16,358,000		9,774,000			65,930,000		35,785,000
Gains on the deconsolidation of VIEs		—		—			2,444,000		—
Other income (expense), net		134,000		(14,000	)		961,000		(43,000	)
Income from continuing operations before income taxes		16,492,000		9,760,000			69,335,000		35,742,000
Income tax expense		6,460,000		3,899,000			25,991,000		13,640,000
Income from continuing operations		10,032,000		5,861,000			43,344,000		22,102,000
Discontinued operations
Loss on discontinued operations before income taxes		—		—			—		(405,000	)
Income tax benefit		—		—			—		120,000
Loss on discontinued operations		—		—			—		(285,000	)
Net income		10,032,000		5,861,000			43,344,000		21,817,000
Income (loss) attributable to noncontrolling
Interests		868,000		(700,000	)		3,219,000		(1,448,000	)
Net income attributable to the stockholders of Argan, Inc.	$	9,164,000	$	6,561,000		$	40,125,000	$	23,265,000
Earnings (loss) per share attributable to the stockholders of Argan, Inc.
Continuing operations
Basic	$	0.64	$	0.47		$	2.85	$	1.71
Diluted	$	0.63	$	0.46		$	2.78	$	1.67
Discontinued operations
Basic	$	—	$	—		$	—	$	(0.02	)
Diluted	$	—	$	—		$	—	$	(0.02	)
Net income
Basic	$	0.64	$	0.47		$	2.85	$	1.69
Diluted	$	0.63	$	0.46		$	2.78	$	1.65
Weighted average number of shares outstanding
Basic		14,219,000		13,951,000			14,072,000		13,784,000
Diluted		14,581,000		14,186,000			14,427,000		14,116,000
Cash dividends declared per common share	$	—	$	—		$	0.75	$	0.60

ARGAN, INC. AND SUBSIDIARIES

RECONCILIATIONS TO EBITDA (Unaudited)

Continuing Operations

	Three Months Ended January 31,
	2014			2013
Income from continuing operations	$	10,032,000		$	5,861,000
(Income) loss—noncontrolling interests		(868,000	)		700,000
Interest expense		—			(266,000	)
Income tax expense		6,460,000			3,874,000
Depreciation		141,000			136,000
Amortization of purchased intangible assets		61,000			61,000
EBITDA attributable to the stockholders of Argan, Inc.	$	15,826,000		$	10,366,000

Power Industry Services

	Three Months Ended January 31,
	2014			2013
Income from continuing operations before income taxes	$	18,324,000		$	11,052,000
(Income) loss before income taxes—noncontrolling interests		(868,000	)		675,000
Interest expense		—			(266,000	)
Depreciation		97,000			85,000
Amortization of purchased intangible assets		61,000			61,000
EBITDA attributable to the stockholders of Argan, Inc.	$	17,614,000		$	11,607,000

Continuing Operations

	Years Ended January 31,
	2014			2013
Income from continuing operations	$	43,344,000		$	22,102,000
(Income) loss—noncontrolling interests		(3,219,000	)		1,448,000
Interest expense		(161,000	)		(688,000	)
Income tax expense		25,559,000			14,072,000
Depreciation		549,000			522,000
Amortization of purchased intangible assets		243,000			243,000
EBITDA attributable to the stockholders of Argan, Inc.	$	66,315,000		$	37,699,000

Power Industry Services

	Years Ended January 31,
	2014			2013
Income from continuing operations before income taxes	$	72,669,000		$	38,515,000
(Income) loss before income taxes—noncontrolling interests		(3,651,000	)		1,880,000
Interest expense		(161,000	)		(688,000	)
Depreciation		366,000			290,000
Amortization of purchased intangible assets		243,000			243,000
EBITDA attributable to the stockholders of Argan, Inc.	$	69,466,000		$	40,240,000

\Management uses EBITDA, a non-GAAP financial measure, for planning purposes, including the preparation of operating budgets and to determine 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 our GAAP results of operations. Pursuant to the requirements of SEC Regulation G, a reconciliation between the Company’s GAAP and non-GAAP financial results is provided 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.

ARGAN, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

	January 31, 2014			January 31, 2013
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	272,209,000		$	175,142,000
Accounts receivable, net of allowance for doubtful accounts		23,687,000			24,879,000
Costs and estimated earnings in excess of billings		527,000			1,178,000
Deferred income tax assets		178,000			1,303,000
Prepaid expenses and other current assets		1,958,000			1,606,000
TOTAL CURRENT ASSETS		298,559,000			204,108,000
Property, plant and equipment, net ($5,309,000 related to variable interest entities as of January 31, 2013)		4,183,000			9,468,000
Goodwill		18,476,000			18,476,000
Intangible assets, net of accumulated amortization		2,088,000			2,331,000
Deferred income tax and other assets		—			341,000
TOTAL ASSETS	$	323,306,000		$	234,724,000
LIABILITIES AND EQUITY
CURRENT LIABILITIES:
Accounts payable	$	22,589,000		$	32,699,000
Accrued expenses		7,911,000			9,488,000
Billings in excess of costs and estimated earnings		134,736,000			73,359,000
TOTAL CURRENT LIABILITIES		165,236,000			115,546,000
Deferred tax and other liabilities		293,000			10,000
TOTAL LIABILITIES		165,529,000			115,556,000
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; 14,289,134 and 13,977,560 shares issued at January 31, 2014 and 2013, respectively; 14,285,901 and 13,974,327 shares outstanding at January 31, 2014 and 2013, respectively		2,143,000			2,096,000
Additional paid-in capital		100,863,000			95,004,000
Retained earnings		53,335,000			23,850,000
Treasury stock, at cost – 3,233 shares at January 31, 2014 and 2013		(33,000	)		(33,000	)
TOTAL STOCKHOLDERS’ EQUITY		156,308,000			120,917,000
Noncontrolling interests		1,469,000			(1,749,000	)
TOTAL EQUITY		157,777,000			119,168,000
TOTAL LIABILITIES AND EQUITY	$	323,306,000		$	234,724,000