8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): September 7, 2010

ARGAN, INC.

(Exact name of registrant as specified in its charter)

Delaware	001-31756	13-1947195
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

One Church Street, Suite 201, Rockville, MD	20850
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (301) 315-0027

Not Applicable

(Former name or former address, if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02. Results of Operations and Financial Condition.

On September 7, 2010, Argan, Inc. (“Argan”) issued a press release announcing its financial results and accomplishments for the three and six months ended July 31, 2010. A copy of Argan’s press release is attached to this report as Exhibit 99.1 and incorporated herein by reference.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits.

Exhibit No.		Description
	99.1	Argan, Inc., Press Release, issued September 7, 2010.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	ARGAN, INC.
Date: September 9, 2010	By:	/s/ Arthur Trudel
		Arthur Trudel
		Senior Vice President and Chief Financial Officer

EXHIBIT INDEX

Exhibit No.		Description
	99.1	Argan, Inc., Press Release, issued September 7, 2010.

EX-99.1

Exhibit 99.1

ARGAN, INC. REPORTS SECOND QUARTER RESULTS

September 7, 2010 — ROCKVILLE, MD — Argan, Inc. (NYSE AMEX: AGX) today announced financial results for the second quarter of fiscal 2011 ended July 31, 2010.

For the quarter ended July 31, 2010, net revenues were $54.5 million compared to $65.5 million in the quarter ended July 31, 2009. Gemma Power Systems (Gemma) contributed $50.4 million, or 92.4% of net revenues in the second quarter of fiscal 2011, compared to $59.8 million, or 91.4% of net revenues in the second quarter of fiscal 2010. Combined net revenues from Argan’s other wholly-owned subsidiaries were $4.1 million, or 7.6% of net revenues for the quarter ended July 31, 2010, compared to $5.7 million, or 8.6% of net revenues for the same quarter last year.

The Company reported consolidated EBITDA (Earnings before interest, taxes, depreciation and amortization) of $5.5 million for the quarter ended July 31, 2010 compared to $4.4 million for the same prior year period. Gemma, for its segment, recorded $7.3 million in EBITDA for the second quarter of fiscal 2011 compared to $5.5 million in the second quarter of fiscal 2010.

Net income for the quarter ended July 31, 2010 was $3.3 million, or $0.24 per diluted share based on 13,699,000 diluted shares outstanding, compared to net income of $2.7 million, or $0.19 per diluted share based on 13,771,000 diluted shares outstanding for the quarter ended July 31, 2009.

In the second quarter of fiscal 2011, the Company reported operating income of $5.2 million compared to operating income of $3.8 million in the second quarter of 2010. The increase in operating income was due primarily to stronger profit performance in its power industry services business segment.

Argan had consolidated cash of $72.0 million and restricted cash of approximately $3.8 million as of July 31, 2010. During the current fiscal year, the Company used cash to reduce long-term debt by $1 million to $833,000 as of July 31, 2010. Consolidated working capital increased during the fiscal year to approximately $69.6 million as of July 31, 2010 from approximately $63.4 million as of January 31, 2010.

Gemma’s backlog as of July 31, 2010 was $281.6 million, a decrease from $299.5 million as of January 31, 2010, primarily due to the completion of a substantial portion of the contract to construct a gas-fired power generation facility in California. A project to construct an eight peaking plant energy facility in southern California, which is included in our backlog with the value of $209.7 million at July 31, 2010, is expected to begin late in our current fiscal year or early next fiscal year.

Commenting on Argan’s results, Rainer Bosselmann, Chairman and Chief Executive Officer stated, “Our Gemma revenues declined 13.6% during the current fiscal year primarily due to the substantial completion of a major power plant project in California. Gemma was able to achieve improved gross margins in spite of the revenue decline, due primarily to the types of costs incurred at the end of its gas-fired construction project and by the efficient on time performance on its renewable energy project.”

“We have active business development initiatives with the objective of replenishing our backlog. With the gas-fired peaking power plant project, which we landed during the second fiscal quarter, we were able to restore approximately $50 million of our backlog volume. We remain focused on the effective and efficient execution of our construction work, and the rational pursuit of new construction opportunities in traditional gas-fired and renewable energy projects. While we would like to see our backlog levels increase, we are also intent on maintaining our pricing integrity to ensure that each project we undertake is completed competently and on time.”

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. 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.

Company Contact:
Rainer Bosselmann/Arthur Trudel
301.315.0027

ARGAN, INC. AND SUBSIDIARIES
Consolidated Statements of Operations

	Three Months Ended July 31,					Six Months Ended July 31,
	(Unaudited)					(Unaudited)
	2010		2009			2010		2009
Net revenues
Power industry services	$	50,373,000	$	59,804,000		$	101,769,000	$	117,839,000
Nutritional products		2,189,000		3,452,000			4,886,000		6,270,000
Telecommunications infrastructure services		1,947,000		2,199,000			3,785,000		4,456,000
Net revenues		54,509,000		65,455,000			110,440,000		128,565,000
Cost of revenues
Power industry services		41,902,000		53,712,000			86,569,000		105,087,000
Nutritional products		2,391,000		3,162,000			5,074,000		5,720,000
Telecommunications infrastructure services		1,638,000		1,625,000			3,431,000		3,375,000
Cost of revenues		45,931,000		58,499,000			95,074,000		114,182,000
Gross profit		8,578,000		6,956,000			15,366,000		14,383,000
Selling, general and administrative expenses		3,365,000		3,188,000			6,939,000		6,401,000
Income from operations		5,213,000		3,768,000			8,427,000		7,982,000
Interest income (expense), net		9,000		(28,000	)		7,000		(39,000	)
Equity in the earnings of the unconsolidated subsidiary		—		408,000			—		1,018,000
Income from operations before income taxes		5,222,000		4,148,000			8,434,000		8,961,000
Income tax expense		1,921,000		1,463,000			3,110,000		3,309,000
Net income	$	3,301,000	$	2,685,000		$	5,324,000	$	5,652,000
Earnings per share
Basic	$	0.24	$	0.20		$	0.39	$	0.42
Diluted	$	0.24	$	0.19		$	0.39	$	0.41
Weighted average number of shares outstanding
Basic		13,593,000		13,492,000			13,589,000		13,469,000
Diluted		13,699,000		13,771,000			13,736,000		13,756,000

ARGAN, INC. AND SUBSIDIARIES

Reconciliations to Consolidated EBITDA (Unaudited)

	Six Months Ended July 31,
	2010		2009
Net income, as reported	$	5,324,000	$	5,652,000
Interest expense		25,000		114,000
Income tax expense		3,110,000		3,309,000
Amortization of purchased intangible assets		175,000		178,000
Depreciation and other amortization		364,000		295,000
EBITDA	$	8,998,000	$	9,548,000

Reconciliations to EBITDA (Unaudited)
Power Industry Services

	Six Months Ended July 31,
	2010		2009
Income before income taxes, as reported	$	12,432,000	$	11,454,000
Interest expense		25,000		104,000
Amortization of purchased intangible assets		175,000		174,000
Depreciation and other amortization		164,000		95,000
EBITDA	$	12,796,000	$	11,827,000

Reconciliations to Consolidated EBITDA (Unaudited)

	Three Months Ended July 31,
	2010		2009
Net income, as reported	$	3,301,000	$	2,685,000
Interest expense		11,000		52,000
Income tax expense		1,921,000		1,463,000
Amortization of purchased intangible assets		88,000		89,000
Depreciation and other amortization		196,000		148,000
EBITDA	$	5,517,000	$	4,437,000

Reconciliations to EBITDA (Unaudited)
Power Industry Services

	Three Months Ended July 31,
	2010		2009
Income before income taxes, as reported	$	7,153,000	$	5,362,000
Interest expense		11,000		48,000
Amortization of purchased intangible assets		88,000		86,000
Depreciation and other amortization		98,000		48,000
EBITDA	$	7,350,000	$	5,544,000

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
Condensed Consolidated Balance Sheets

	July 31, 2010			January 31, 2010
	(Unaudited)			(Note 1)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	71,980,000		$	66,009,000
Restricted cash		3,824,000			5,002,000
Accounts receivable, net of allowance for doubtful accounts		13,688,000			4,979,000
Costs and estimated earnings in excess of billings		8,310,000			12,931,000
Inventories, net of obsolescence reserve		1,917,000			2,010,000
Deferred income tax assets		1,065,000			1,603,000
Prepaid expenses and other current assets		1,188,000			2,697,000
TOTAL CURRENT ASSETS		101,972,000			95,231,000
Property and equipment, net of accumulated depreciation		1,515,000			1,540,000
Goodwill		18,476,000			18,476,000
Intangible assets, net of accumulated amortization		3,083,000			3,258,000
Deferred income tax assets		1,720,000			1,628,000
Other assets		100,000			140,000
TOTAL ASSETS	$	126,866,000		$	120,273,000
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES:
Accounts payable	$	15,451,000		$	17,906,000
Accrued expenses		6,515,000			10,254,000
Billings in excess of costs and estimated earnings		9,526,000			1,874,000
Current portion of long-term debt		833,000			1,833,000
TOTAL CURRENT LIABILITIES		32,325,000			31,867,000
Other liabilities		34,000			38,000
TOTAL LIABILITIES		32,359,000			31,905,000
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; 13,599,727 and 13,585,727 shares issued at 7/31/10 and 1/31/10, and 13,596,494 and 13,582,494 shares outstanding at 7/31/10 and 1/31/10, respectively		2,040,000			2,038,000
Warrants outstanding		601,000			613,000
Additional paid-in capital		87,873,000			87,048,000
Accumulated deficit		4,026,000			(1,298,000	)
Treasury stock, at cost; 3,233 shares at 7/31/10 and 1/31/10		(33,000	)		(33,000	)
TOTAL STOCKHOLDERS’ EQUITY		94,507,000			88,368,000
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	126,866,000		$	120,273,000

Note 1 — The condensed consolidated balance sheet as of January 31, 2010 has been derived from audited financial statements.