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Argan, Inc. Reports Second Quarter Results

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% 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% 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.

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