Argan : September 7, 2017 - ARGAN, INC. ANNOUNCES SECOND QUARTER RESULTS.

Argan, Inc. Reports Second Quarter Results

September 7, 2017 - ROCKVILLE, MD - Argan, Inc. (NYSE: AGX) ("Argan" or the "Company") today announced financial results for its second quarter ended July 31, 2017. For additional information, please read the Company's Quarterly Report on Form 10-Q, which the Company intends to file today with the U.S. Securities and Exchange Commission (the "SEC"). The Quarterly Report can be retrieved from the SEC's website at www.sec.gov or from the Company's website at www.arganinc.com.

Summary Information: (dollars in thousands, except per share data (unaudited)): For the Quarter Ended:

July 31,

2017 2016 Change

%

Change

Revenues

$ 259,803

51,4

$ 162,495

44,0

$

97,308 60%

Gross profit

07 12 7,395 17

Gross margins 19.8% 27.1% (7.3) (27) Net income attributable to

the stockholders of the

Company $ 27,139 $ 19,674

$

7,465 38

Diluted per share EBITDA attributable to the stockholders of the Company

1. 1.

72	29	0.43	33
42,7	32,1
12	14	10,598	33
2.	2.
71	10	0.61	29

Diluted per share

For the Six Months Ended:
$	$	$
Revenues	490,292	292,843	197,449	67%
91,5	72,3
Gross profit	03	14	19,189	27

Gross margins 18.7% 24.7% (6.0) (24) Net income attributable to

the stockholders of the

Company $ 47,764 $ 31,904

$

15,860 50

Diluted per share

3. 2.

03 09 0.94 45

75,1	52,2
68	71	22,897	44
4.	3.
76	43	1.33	39

EBITDA attributable to the stockholders of the Company

Diluted per share

As of:

July 31, 2017

January 31,

2017 Change

%

Change

Cash, cash equivalents and	$	$
short-term investments	$ 557,150	522,994	34,156	7 %
Billings in excess of costs
and estimated earnings	190,581	209,241	(18,660)	(9)
1,011,00	(335,000

Backlog 676,000 0

) (33)

Second Quarter Results:

Revenues increased to a quarterly record of $260 million, up 60% compared to the prior year quarter, primarily due to Gemma Power Systems (GPS) having reached peak construction activities on four large, natural gas-fired power plants. The power industry services segment continues to drive our financial results and represents 92% of consolidated revenues for the quarter ended July 31, 2017. Gross profit increased 17% to $51 million, primarily due to the increased revenues, while gross margin percentage decreased from 27.1% to 19.8% compared to the prior year quarter, which primarily reflected the achievement of the substantial completion of two natural gas-fired power plant projects in the prior year period.

Selling, general and administrative expenses increased $3.3 million to $10.8 million, primarily due to increased incentive and stock option compensation and human capital costs reflective of larger operations, but decreased as a percentage of revenues to 4.2% from 4.6% in the prior year quarter. Also in the prior year quarter, Atlantic Projects Company (APC) recorded an impairment loss on goodwill of

$2.0 million, reflecting the suspension of a major project and other "Brexit" impacts to its operations in the UK at that time. Net income attributable to non-controlling interests decreased 95%, or $3.4 million, as activities on two large power plant projects were completed last year by joint ventures. These factors and a relatively consistent effective income tax rate resulted in second quarter net income attributable to our stockholders increasing 38% to $27.1 million, or $1.72 per diluted share, compared to $19.7 million, or $1.29 per diluted share, for the prior year quarter. EBITDA attributable to the stockholders for the quarter ended July 31, 2017 increased 33% to $42.7 million, or $2.71 per diluted share, from $32.1 million, or $2.10 per diluted share, for the prior year quarter.

Six Month Results:

For the six months ended July 31, 2017, consolidated revenues increased 67% to a record $490 million over the prior year period, primarily due to GPS having ramped up and reached peak construction activities on four large, natural gas-fired power plants. The power industry services segment also

represented 92% of consolidated revenues for the six months ended July 31, 2017. Gross profit increased 27% to $92 million, primarily due to the increased revenues, while gross margin percentage decreased from 24.7% to 18.7% compared to the prior year period, which primarily reflected the reason discussed above, the changes in the mix and progress of various power plant projects and the differences in their respective gross margins.

For the same reasons discussed above, for the six months ended July 31, 2017, selling, general and administrative expenses increased $5.7 million to $20.3 million and net income attributable to non- controlling interests decreased 95%, or $5.2 million, over the prior year period. In addition, other income from short-term investments increased $1.9 million from the prior year period due to higher yields and investment balances. These factors and a relatively consistent effective income tax rate resulted in net income attributable to our stockholders for the six months ended July 31, 2017 increasing 50% to $47.8 million, or $3.03 per diluted share, compared to $31.9 million, or $2.09 per diluted share, for the prior year period. EBITDA attributable to the stockholders for the six months ended July 31, 2017 increased 44% to $75.2 million, or $4.76 per diluted share, from $52.3 million, or $3.43 per diluted share, for the prior year period.

The Company's balance sheet continues to strengthen. As of July 31, 2017, cash, cash equivalents and short-term investments totaled $557 million and net liquidity was $288 million. The Company has no bank debt. The work performed in the quarter reduced the contract backlog. However, the decrease was partially offset with the addition of the APC contract for the erection of a 299 MW biomass boiler in Teesside, England. Contract backlog remained a healthy $0.7 billion as of July 31, 2017.

Commenting on Argan's results, Rainer Bosselmann, Chairman and Chief Executive Officer, stated, "On a trailing twelve-month basis, we have reached $872 million in revenues, $86 million in net income and $134 million in EBITDA. This growth is a direct result of our continued successful execution on major EPC projects due, in no small part, to the dedication and determination of our employees. As these projects move from peak construction to their later stages, we are committed to maintaining the quality of performance and customer satisfaction while creating shareholder value, and we remain hard at work in our efforts to add new projects to the Company backlog."

About Argan, Inc.

Argan's primary business is providing a full range of services to the power industry including the engineering, procurement and construction of natural gas-fired power plants, along with related commissioning, operations management, maintenance, project development and consulting services, through its Gemma Power Systems and Atlantic Projects Company operations. Argan also owns SMC Infrastructure Solutions, which provides telecommunications infrastructure services, and The Roberts Company, which is a fully integrated fabrication, construction and industrial plant services company.

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 continued strong performance of our power industry services business; (2) the Company's ability to successfully and profitably integrate acquisitions; and (3) the Company's ability to achieve its business strategy while effectively managing costs and expenses. 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 SEC. 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 DavidWatson

301.315.0027 301.315.0027