##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-Q
  þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the Quarterly Period Ended April 30, 2011
 or
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT
 For the Transition Period from  to
 Commission File Number 001-31756
 Argan, Inc.
 (Exact Name of Registrant as Specified in Its Charter)
 Delaware
    
    13-1947195(State or Other Jurisdiction of Incorporation)
    
    (I.R.S. Employer Identification No.)
 One Church Street, Suite 201, Rockville, Maryland 20850
 (301) 315-0027  (Registrants Telephone Number, Including Area Code)
 (Former Name, Former Address and Former Fiscal Year,
 þ o
 o o
  Large accelerated filer o
    
    Accelerated filer o
    
    Non-accelerated filer o
    
    Smaller reporting company þ
 o þ




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##### 



ARGAN, INC. AND SUBSIDIARIES
INDEX
 Page No.PART I. FINANCIAL INFORMATION
    
    
    3Item 1. Financial Statements
    
    
    3Condensed Consolidated Balance Sheets  April 30, 2011 and January 31, 2011
    
    
    3Condensed Consolidated Statements of Operations for the Three Months Ended April 30, 2011 and 2010
    
    
    4Condensed Consolidated Statements of Cash Flows for the Three Months Ended April 30, 2011 and 2010
    
    
    5Notes to Condensed Consolidated Financial Statements
    
    
    6Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    15Item 3. Quantitative and Qualitative Disclosures about Market Risk
    
    
    25Item 4. Controls and Procedures
    
    
    25PART II. OTHER INFORMATION
    
    
    25Item 1. Legal Proceedings
    
    
    25Item 1A. Risk Factors
    
    
    25Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    26Item 3. Defaults in Senior Securities
    
    
    26Item 4. [Removed and Reserved]
    
    
    26Item 5. Other Information
    
    
    26Item 6. Exhibits
    
    
    26SIGNATURES
    
    
    26CERTIFICATIONSEX-10.1EX-31.1EX-31.2EX-32.1EX-32.2
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ARGAN, INC. AND SUBSIDIARIES
 
 CONDENSED CONSOLIDATED BALANCE SHEETS
 April 30, 2011
    
    
    January 31, 2011(Unaudited)
    
    
    (Note 1)ASSETSCURRENT ASSETS:Cash and cash equivalents
    
    $
    78,906,000
    
    
    $
    83,292,000Restricted cash
    
    
    
    
    
    
    1,243,000Accounts receivable, net of allowance for doubtful accounts
    
    
    5,712,000
    
    
    
    13,099,000Costs and estimated earnings in excess of billings
    
    
    421,000
    
    
    
    1,443,000Deferred income tax assets
    
    
    417,000
    
    
    
    91,000Prepaid expenses and other current assets
    
    
    1,364,000
    
    
    
    520,000Assets held for sale
    
    
    780,000
    
    
    
    6,354,000TOTAL CURRENT ASSETS
    
    
    87,600,000
    
    
    
    106,042,000Property and equipment, net of accumulated depreciation
    
    
    1,370,000
    
    
    
    1,478,000Goodwill
    
    
    18,476,000
    
    
    
    18,476,000Intangible assets, net of accumulated amortization and impairment losses
    
    
    2,821,000
    
    
    
    2,908,000Deferred income tax assets
    
    
    995,000
    
    
    
    999,000Other assets
    
    
    20,000
    
    
    
    14,000Assets held for sale
    
    
    226,000
    
    
    
    625,000TOTAL ASSETS
    
    $
    111,508,000
    
    
    $
    130,542,000LIABILITIES AND STOCKHOLDERS EQUITYCURRENT LIABILITIES:Accounts payable
    
    $
    5,513,000
    
    
    $
    8,555,000Accrued expenses
    
    
    4,878,000
    
    
    
    13,035,000Billings in excess of costs and estimated earnings
    
    
    2,566,000
    
    
    
    9,916,000Liabilities related to assets held for sale
    
    
    43,000
    
    
    
    1,362,000TOTAL CURRENT LIABILITIES
    
    
    13,000,000
    
    
    
    32,868,000Other liabilities
    
    
    28,000
    
    
    
    29,000TOTAL LIABILITIES
    
    
    13,028,000
    
    
    
    32,897,000COMMITMENTS AND CONTINGENCIES(Note 12)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;
13,605,227 and 13,602,227 shares issued at April 30 and January 31, 2011,
and 13,601,994 and 13,598,994 shares outstanding at April 30 and January
31, 2011
    
    
    2,041,000
    
    
    
    2,040,000Warrants outstanding
    
    
    601,000
    
    
    
    601,000Additional paid-in capital
    
    
    88,789,000
    
    
    
    88,561,000Retained earnings
    
    
    7,082,000
    
    
    
    6,476,000Treasury stock, at cost  3,233 shares at April 30 and January 31, 2011
    
    
    (33,000
    )
    
    
    (33,000
    )TOTAL STOCKHOLDERS EQUITY
    
    
    98,480,000
    
    
    
    97,645,000TOTAL LIABILITIES AND STOCKHOLDERS EQUITY
    
    $
    111,508,000
    
    
    $
    130,542,000
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ARGAN, INC. AND SUBSIDIARIES
 
 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
 (Unaudited)
 Three Months Ended April 30,2011
    
    
    2010Net revenuesPower industry services
    
    $
    14,019,000
    
    
    $
    51,396,000Telecommunications infrastructure services
    
    
    1,974,000
    
    
    
    1,838,000Net revenues
    
    
    15,993,000
    
    
    
    53,234,000Cost of revenuesPower industry services
    
    
    10,481,000
    
    
    
    44,667,000Telecommunications infrastructure services
    
    
    1,614,000
    
    
    
    1,793,000Cost of revenues
    
    
    12,095,000
    
    
    
    46,460,000Gross profit
    
    
    3,898,000
    
    
    
    6,774,000Selling, general and administrative expenses
    
    
    2,759,000
    
    
    
    3,034,0001,139,000
    
    
    
    3,740,000Interest expense
    
    
    
    
    
    
    (14,000
    )Investment income
    
    
    22,000
    
    
    
    12,000Income from continuing operations before income taxes
    
    
    1,161,000
    
    
    
    3,738,000Income tax expense
    
    
    416,000
    
    
    
    1,383,000Income from continuing operations
    
    
    745,000
    
    
    
    2,355,000Discontinued operationsLoss on discontinued operations (including gain on disposal
of $152,000 in 2011)
    
    
    (65,000
    )
    
    
    (526,000
    )Income tax (expense) benefit
    
    
    (74,000
    )
    
    
    194,000Loss on discontinued operations
    
    
    (139,000
    )
    
    
    (332,000
    )Net income
    
    $
    606,000
    
    
    $
    2,023,000Earnings per share:Continuing operationsBasic
    
    $
    0.05
    
    
    $
    0.17Diluted
    
    $
    0.05
    
    
    $
    0.17Discontinued operationsBasic
    
    $
    (0.01
    )
    
    $
    (0.02
    )Diluted
    
    $
    (0.01
    )
    
    $
    (0.02
    )Net incomeBasic
    
    $
    0.04
    
    
    $
    0.15Diluted
    
    $
    0.04
    
    
    $
    0.15Weighted average number of shares outstanding:Basic
    
    
    13,601,000
    
    
    
    13,584,000Diluted
    
    
    13,679,000
    
    
    
    13,790,000
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ARGAN, INC. AND SUBSIDIARIES
 
 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
 (Unaudited)
 Three Months Ended April 30,2011
    
    
    2010CASH FLOWS FROM OPERATING ACTIVITIES:Net income
    
    $
    606,000
    
    
    $
    2,023,000Removal of loss on discontinued operations
    
    
    139,000
    
    
    
    332,000Income from continuing operations
    
    
    745,000
    
    
    
    2,355,000Adjustments to reconcile income from continuing operations to
net cash used in continuing operating activities:Deferred income tax expense
    
    
    14,000
    
    
    
    355,000Stock option compensation expense
    
    
    211,000
    
    
    
    320,000Amortization of purchased intangibles
    
    
    87,000
    
    
    
    87,000Depreciation and other amortization
    
    
    117,000
    
    
    
    168,000Changes in operating assets and liabilities:Restricted cash
    
    
    1,243,000
    
    
    
    Accounts receivable
    
    
    7,387,000
    
    
    
    (9,053,000
    )Costs and estimated earnings in excess of billings
    
    
    1,022,000
    
    
    
    766,000Prepaid expenses and other assets
    
    
    (850,000
    )
    
    
    972,000Accounts payable and accrued expenses
    
    
    (8,155,000
    )
    
    
    (985,000
    )Billings in excess of costs and estimated earnings
    
    
    (7,350,000
    )
    
    
    2,557,000Net cash used in continuing operating activities
    
    
    (5,529,000
    )
    
    
    (2,458,000
    )Net cash (used in) provided by discontinued operating activities
    
    
    (235,000
    )
    
    
    199,000Net cash used in operating activities
    
    
    (5,764,000
    )
    
    
    (2,259,000
    )CASH FLOWS FROM INVESTING ACTIVITIES:Purchases of property and equipment, net
    
    
    (9,000
    )
    
    
    (160,000
    )Net cash used in investing activities of continuing operations
    
    
    (9,000
    )
    
    
    (160,000
    )Net cash provided by investing activities of discontinued operations
    
    
    1,369,000
    
    
    
    Net cash provided by (used in) investing activities
    
    
    1,360,000
    
    
    
    (160,000
    )CASH FLOWS FROM FINANCING ACTIVITIES:Net proceeds from the exercise of stock options and warrants
    
    
    18,000
    
    
    
    35,000Principal payments on long-term debt
    
    
    
    
    
    
    (500,000
    )Net cash provided by (used in) financing activities of continuing
operations
    
    
    18,000
    
    
    
    (465,000
    )Net cash provided by financing activities of discontinued operations
    
    
    
    
    
    
    Net cash provided by (used in) financing activities
    
    
    18,000
    
    
    
    (465,000
    )NET DECREASE IN CASH AND CASH EQUIVALENTS
    
    
    (4,386,000
    )
    
    
    (2,884,000
    )CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD
    
    
    83,292,000
    
    
    
    66,153,000CASH AND CASH EQUIVALENTS, END OF PERIOD
    
    $
    78,906,000
    
    
    $
    63,269,000SUPPLEMENTAL CASH FLOW INFORMATION:Cash paid for interest and income taxes:Interest
    
    $
    
    
    
    $
    14,000Income taxes
    
    $
    2,227,000
    
    
    $
    62,000
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ARGAN, INC. AND SUBSIDIARIES
 
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 APRIL 30, 2011
 (Unaudited)
 NOTE 1  DESCRIPTION OF THE BUSINESS AND BASIS OF PRESENTATION
 Description of the Business
  Basis of Presentation
    Fair Values
 Fair Value Measurements and Disclosures
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Fair Value Measurements and Disclosures Fair Value Measurements and Disclosures  Overall
Subtopic,
 NOTE 2  DISPOSITION OF DISCONTINUED OPERATIONS
    April 30,
    
    
    January 31,2011
    
    
    2011Accounts receivable, net
    
    $
    
    
    
    $
    1,197,000Inventories, net
    
    
    
    
    
    
    1,086,000Refundable income taxes
    
    
    
    
    
    
    3,044,000Deferred tax and other assets
    
    
    780,000
    
    
    
    1,027,000Total current assets
    
    
    780,000
    
    
    
    6,354,000Property, machinery and equipment
    
    
    
    
    
    
    Deferred tax and other assets
    
    
    226,000
    
    
    
    625,000Total noncurrent assets
    
    
    226,000
    
    
    
    625,000Total assets held for sale
    
    $
    1,006,000
    
    
    $
    6,979,000Accounts payable
    
    $
    33,000
    
    
    $
    906,000Accrued expenses
    
    
    10,000
    
    
    
    456,000Total current liabilities
    
    
    43,000
    
    
    
    1,362,000Total noncurrent liabilities
    
    
    
    
    
    
    Total liabilities related
to assets held for sale
    
    $
    43,000
    
    
    $
    1,362,000
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NOTE 3  CASH, CASH EQUIVALENTS AND RESTRICTED CASH
   NOTE 4  ACCOUNTS RECEIVABLE; COSTS AND ESTIMATED EARNINGS IN EXCESS OF BILLINGS
   NOTE 5  PROPERTY AND EQUIPMENT
  April 30,
    
    
    January 31,2011
    
    
    2011Leasehold improvements
    
    $
    208,000
    
    
    $
    208,000Machinery and equipment
    
    
    2,520,000
    
    
    
    2,511,000Trucks and other vehicles
    
    
    1,738,000
    
    
    
    1,738,0004,466,000
    
    
    
    4,457,000Less  accumulated depreciation
    
    
    (3,096,000
    )
    
    
    (2,979,000
    )Property and equipment, net
    
    $
    1,370,000
    
    
    $
    1,478,000
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NOTE 6  INTANGIBLE ASSETS
  April 30, 2011
    
    
    January 31,Estimated
    
    Gross
    
    
    
    
    
    
    
    
    
    
    2011Useful
    
    Carrying
    
    
    Accumulated
    
    
    Net
    
    
    NetLife
    
    Amount
    
    
    Amortization
    
    
    Amount
    
    
    AmountIntangible assets
being amortized:Non-compete agreements
 GPS
    
    5 years
    
    $
    534,000
    
    
    $
    469,000
    
    
    $
    65,000
    
    
    $
    91,000Trade name  GPS
    
    15 years
    
    
    3,643,000
    
    
    
    1,068,000
    
    
    
    2,575,000
    
    
    
    2,636,000Intangible asset not
being amortized:Trade name  SMC
    
    Indefinite
    
    
    181,000
    
    
    
    
    
    
    
    181,000
    
    
    
    181,000Total intangible assets
    
    
    
    $
    4,358,000
    
    
    $
    1,537,000
    
    
    $
    2,821,000
    
    
    $
    2,908,000Goodwill  GPS
    
    Indefinite
    
    $
    18,476,000
    
    
    $
    
    
    
    $
    18,476,000
    
    
    $
    18,476,000
  NOTE 7  ACCRUED LIABILITIES
  NOTE 8  FINANCING ARRANGEMENTS
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NOTE 9  STOCK-BASED COMPENSATION
   WeightedWeighted
    
    
    Average
    
    
    WeightedAverage
    
    
    Remaining
    
    
    AverageExercise
    
    
    Contract
    
    
    FairOptions
    
    Shares
    
    
    Price
    
    
    Term (Years)
    
    
    ValueOutstanding, January 31, 2011
    
    
    676,000
    
    
    $
    11.29
    
    
    
    5.78
    
    
    $
    5.79Granted
    
    
    72,000
    
    
    $
    8.97Forfeited
    
    
    (3,000
    )
    
    $
    12.43Exercised
    
    
    (3,000
    )
    
    $
    5.90Outstanding, April 30, 2011
    
    
    742,000
    
    
    $
    11.09
    
    
    
    5.63
    
    
    $
    5.63Exercisable, April 30, 2011
    
    
    610,000
    
    
    $
    11.56
    
    
    
    5.38
    
    
    $
    5.92Exercisable, January 31, 2011
    
    
    439,000
    
    
    $
    10.12
    
    
    
    5.90
    
    
    $
    5.51
  WeightedAverageShares
    
    
    Fair ValueNonvested, January 31, 2011
    
    
    237,000
    
    
    $
    6.31Granted
    
    
    72,000
    
    
    $
    4.04Vested
    
    
    (177,000
    )
    
    $
    6.92Nonvested, April 30, 2011
    
    
    132,000
    
    
    $
    4.24
   Three MonthsEnded April 30,2011Dividend yield
    
    
    Expected volatility
    
    
    57.60
    %Risk-free interest rate
    
    
    3.42
    %Expected life in years
    
    
    3.69
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NOTE 10  INCOME TAXES
  Three Months Ended April 30,2011
    
    
    2010Computed expected income tax expense
    
    $
    395,000
    
    
    $
    1,271,000State income taxes, net of federal tax benefit
    
    
    31,000
    
    
    
    192,000Permanent differences, net
    
    
    10,000
    
    
    
    (80,000
    )Other, net
    
    
    (20,000
    )
    
    
    $
    416,000
    
    
    $
    1,383,000
    NOTE 11  INCOME (LOSS) PER SHARE
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NOTE 12  LEGAL CONTINGENCIES
  Altra Matters
     Tampa Bay Nutraceutical Company
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NOTE 13  MAJOR CUSTOMERS
   NOTE 14  SEGMENT REPORTING
   TelecomPower Industry
    
    
    InfrastructureThree Months Ended April 30, 2011
    
    Services
    
    
    Services
    
    
    Other
    
    
    ConsolidatedNet revenues
    
    $
    14,019,000
    
    
    $
    1,974,000
    
    
    $
    
    
    
    $
    15,993,000Cost of revenues
    
    
    10,481,000
    
    
    
    1,614,000
    
    
    
    
    
    
    
    12,095,000Gross profit
    
    
    3,538,000
    
    
    
    360,000
    
    
    
    
    
    
    
    3,898,000Selling, general and administrative
expenses
    
    
    1,413,000
    
    
    
    397,000
    
    
    
    949,000
    
    
    
    2,759,000Income (loss) from operations
    
    
    2,125,000
    
    
    
    (37,000
    )
    
    
    (949,000
    )
    
    
    1,139,000Investment income
    
    
    15,000
    
    
    
    
    
    
    
    7,000
    
    
    
    22,000Income (loss) before income taxes
    
    $
    2,140,000
    
    
    $
    (37,000
    )
    
    $
    (942,000
    )
    
    
    1,161,000Income tax expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    416,000Income from continuing operations
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    745,000Amortization of purchased intangibles
    
    $
    87,000
    
    
    $
    
    
    
    $
    
    
    
    $
    87,000Depreciation and other amortization
    
    $
    49,000
    
    
    $
    67,000
    
    
    $
    1,000
    
    
    $
    117,000Fixed asset additions
    
    $
    
    
    
    $
    5,000
    
    
    $
    4,000
    
    
    $
    9,000Goodwill
    
    $
    18,476,000
    
    
    $
    
    
    
    $
    
    
    
    $
    18,476,000Total assets
    
    $
    80,839,000
    
    
    $
    2,255,000
    
    
    $
    27,408,000
    
    
    $
    110,502,000
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TelecomPower Industry
    
    
    InfrastructureThree Months Ended April 30, 2010
    
    Services
    
    
    Services
    
    
    Other
    
    
    ConsolidatedNet revenues
    
    $
    51,396,000
    
    
    $
    1,838,000
    
    
    $
    
    
    
    $
    53,234,000Cost of revenues
    
    
    44,667,000
    
    
    
    1,793,000
    
    
    
    
    
    
    
    46,460,000Gross profit
    
    
    6,729,000
    
    
    
    45,000
    
    
    
    
    
    
    
    6,774,000Selling, general and administrative
expenses
    
    
    1,445,000
    
    
    
    501,000
    
    
    
    1,088,000
    
    
    
    3,034,000Income (loss) from operations
    
    
    5,284,000
    
    
    
    (456,000
    )
    
    
    (1,088,000
    )
    
    
    3,740,000Interest expense
    
    
    (14,000
    )
    
    
    
    
    
    
    
    
    
    
    (14,000
    )Investment income
    
    
    9,000
    
    
    
    
    
    
    
    3,000
    
    
    
    12,000Income (loss) before income taxes
    
    $
    5,279,000
    
    
    $
    (456,000
    )
    
    $
    (1,085,000
    )
    
    
    3,738,000Income tax expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,383,000Income from continuing operations
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    2,355,000Amortization of purchased intangibles
    
    $
    87,000
    
    
    $
    
    
    
    $
    
    
    
    $
    87,000Depreciation and other amortization
    
    $
    67,000
    
    
    $
    100,000
    
    
    $
    1,000
    
    
    $
    168,000Fixed asset additions
    
    $
    141,000
    
    
    $
    22,000
    
    
    $
    
    
    
    $
    163,000Goodwill
    
    $
    18,476,000
    
    
    $
    
    
    
    $
    
    
    
    $
    18,476,000Total assets
    
    $
    84,883,000
    
    
    $
    2,388,000
    
    
    $
    30,560,000
    
    
    $
    117,831,000
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ITEM 2.
    
    MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
  Cautionary Statement Regarding Forward Looking Statements
  Business Description
  Overview and Outlook
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Discontinued Operations
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Comparison of the Results of Operations for the Three Months Ended April 30, 2011 and 2010
  2011
    
    
    2010Net revenuesPower industry services
    
    $
    14,019,000
    
    
    
    87.7
    %
    
    $
    51,396,000
    
    
    
    96.5
    %Telecommunications infrastructure services
    
    
    1,974,000
    
    
    
    12.3
    %
    
    
    1,838,000
    
    
    
    3.5
    %Net revenues
    
    
    15,993,000
    
    
    
    100.0
    %
    
    
    53,234,000
    
    
    
    100.0
    %Cost of revenues **Power industry services
    
    
    10,481,000
    
    
    
    74.8
    %
    
    
    44,667,000
    
    
    
    86.9
    %Telecommunications infrastructure services
    
    
    1,614,000
    
    
    
    81.8
    %
    
    
    1,793,000
    
    
    
    97.6
    %Cost of revenues
    
    
    12,095,000
    
    
    
    75.6
    %
    
    
    46,460,000
    
    
    
    87.3
    %Gross profit
    
    
    3,898,000
    
    
    
    24.4
    %
    
    
    6,774,000
    
    
    
    12.7
    %Selling, general and administrative expenses
    
    
    2,759,000
    
    
    
    17.3
    %
    
    
    3,034,000
    
    
    
    5.7
    %1,139,000
    
    
    
    7.1
    %
    
    
    3,740,000
    
    
    
    7.0
    %Interest expense
    
    
    
    
    
    
    *
    
    
    
    (14,000
    )
    
    
    *Investment income
    
    
    22,000
    
    
    
    *
    
    
    
    12,000
    
    
    
    *Income from continuing operations before
income taxes
    
    
    1,161,000
    
    
    
    7.3
    %
    
    
    3,738,000
    
    
    
    7.0
    %Income tax expense
    
    
    416,000
    
    
    
    2.6
    %
    
    
    1,383,000
    
    
    
    2.6
    %Income from continuing operations
    
    
    745,000
    
    
    
    4.7
    %
    
    
    2,355,000
    
    
    
    4.4
    %Loss on discontinued operations
    
    
    139,000
    
    
    
    *
    
    
    
    332,000
    
    
    
    *Net income
    
    $
    606,000
    
    
    
    3.8
    %
    
    $
    2,023,000
    
    
    
    3.8
    %
 *
    
    Less than 1%.**
    
    The cost of revenues percentage amounts represent the percentage of net revenues of
the applicable segment. Net Revenues
 Power Industry Services
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Telecommunications Infrastructure Services
    Cost of Revenues
  Selling, General and Administrative Expenses
  Income Tax Expense
   - 19 -




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Liquidity and Capital Resources as of April 30, 2011
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Earnings before Interest, Taxes, Depreciation and Amortization (Non-GAAP Measurement)
    2011
    
    
    2010Income from continuing operations, as reported
    
    $
    745,000
    
    
    $
    2,355,000Interest expense
    
    
    
    
    
    
    14,000Income tax expense
    
    
    416,000
    
    
    
    1,383,000Amortization of purchased intangible assets
    
    
    87,000
    
    
    
    87,000Depreciation and other amortization
    
    
    117,000
    
    
    
    168,000EBITDA
    
    $
    1,365,000
    
    
    $
    4,007,000
  2011
    
    
    2010EBITDA
    
    $
    1,365,000
    
    
    $
    4,007,000Current income tax expense
    
    
    (402,000
    )
    
    
    (1,028,000
    )Interest expense
    
    
    
    
    
    
    (14,000
    )Non-cash stock option compensation expense
    
    
    211,000
    
    
    
    320,000Decrease in restricted cash
    
    
    1,243,000
    
    
    
    Decrease (increase) in accounts receivable
    
    
    7,387,000
    
    
    
    (9,053,000
    )Change related to the timing of scheduled billings
    
    
    (6,328,000
    )
    
    
    3,323,000Decrease in accounts payable and accrued liabilities
    
    
    (8,155,000
    )
    
    
    (985,000
    )Other, net
    
    
    (850,000
    )
    
    
    972,000Net cash used in continuing operations
    
    $
    (5,529,000
    )
    
    $
    (2,458,000
    )
 Off-Balance Sheet Arrangements
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Inflation
  Critical Accounting Policies
   Revenue Recognition
 .
   - 22 -




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Goodwill and Other Indefinite-Lived Intangible Assets
      Long-Lived Assets
   - 23 -




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##### Table of Contents



Deferred Tax Assets
  Stock Options
  Legal Contingencies
  Adopted and Other Recently Issued Accounting Pronouncements
   - 24 -




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##### Table of Contents



ITEM 3.
    
    QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
  
 ITEM 4.
    
    CONTROLS AND PROCEDURES
 Evaluation of disclosure controls and procedures.
 Changes in internal controls over financial reporting.
 
 PART II
 OTHER INFORMATION
 
 ITEM 1.
    
    LEGAL PROCEEDINGS
   
 ITEM 1A.
    
    RISK FACTORS
  www.arganinc.com
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ITEM 2.
    
    UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
  
 ITEM 3.
    
    DEFAULTS UPON SENIOR SECURITIES
  
 ITEM 4.
    
    [REMOVED AND RESERVED]
 
 ITEM 5.
    
    OTHER INFORMATION
  
 ITEM 6.
    
    EXHIBITS
 Exhibit No.
    
    TitleExhibit: 10.1
    
    Fifth Amendment to Second Amended and Restated Financing and Security
Agreement, dated May 31, 2011, by and among Argan, Inc.; Southern Maryland
Cable, Inc.; Gemma Power Systems, LLC; Gemma Power, Inc.; Gemma Power
Systems California, Inc.; Gemma Power Hartford, LLC and Bank of America,
N.A.Exhibit: 31.1
    
    Certification of Chief Executive Officer, pursuant to Rule 13a-14(c) under
the Securities Exchange Act of 1934Exhibit: 31.2
    
    Certification of Chief Financial Officer, pursuant to Rule 13a-14(c) under
the Securities Exchange Act of 1934Exhibit: 32.1
    
    Certification of Chief Executive Officer, pursuant to 18 U.S.C. Section 1350Exhibit: 32.2
    
    Certification of Chief Financial Officer, pursuant to 18 U.S.C. Section 1350
 
 SIGNATURES
  ARGAN, INC.June 13, 2011
    
    By:
    
    /s/ Rainer H. Bosselmann

Rainer H. BosselmannChairman of the Board and Chief Executive OfficerJune 13, 2011
    
    By:
    
    /s/ Arthur F. Trudel

Arthur F. TrudelSenior Vice President, Chief Financial Officerand Secretary
  - 26 -