Argan, Inc. Announces First Quarter Results.

ROCKVILLE, Md. -- Argan, Inc. (OTCBB:AGAX) today announced financial results for the first quarter ended April 30, 2007.

Net sales for the quarter were $50.4 million compared to $8.96 million for the three months ended April 30, 2006. Gemma Power Systems, acquired in December 2006, contributed $43.4 million in revenues for the quarter. Revenue for the quarter at Southern Maryland Cable (SMC) declined to $2.1 million from $3.1 million in the same quarter last year and revenue at Vitarich Laboratories, Inc. (VLI) decreased to $4.9 million from $5.8 million. Net loss for the quarter was $2.0 million, or $0.18 per share based on 11,094,000 shares outstanding, compared to a net loss of $18,000, or $0.00 per share based on 3,814,000 shares outstanding in the first three months of last year.

The Company believes that the Non-GAAP Measurement of Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) provides investors with a valuable supplemental measure of our operating performance. EBITDA for the first quarter ended April 30, 2007 was a loss of $362,000 compared to EBITDA of $857,000 in the first quarter of last year.

Cash and cash equivalents at April 30, 2007 increased to $32.6 million from $25.4 million at January 31, 2007.

Rainer Bosselmann, Chairman and Chief Executive Officer, stated, "During the quarter, we experienced an unexpected increase in costs related to one of our Gemma contracts. These higher costs, primarily stemming from labor rate increases due to overtime requirements and additional material costs, have resulted in a forecasted loss for the project of approximately $4.1 million during the quarter ended April 30, 2007. The project was 95% complete as of April 30, 2007 and the cumulative $3.9 million loss was recognized as of April 30, 2007 and incorporates our estimates of project costs through completion."

Mr. Bosselmann continued, "Demand at Gemma is very strong and our backlog at April 30 was over $200 million, bolstered by a $74 million contract which we received in April for a biodiesel plant in Texas. We are very well positioned to drive significant revenue growth this year and improving profitability as we benefit from the long term increase in new power plants driven by the economic viability of renewable energy, government mandates and environmental benefits."

Mr. Bosselmann indicated that "SMC experienced a slow start for the year in its inside plant division. We have made some changes to broaden our product offerings and to diversify our customer base. VLI, in addition to its sales decline, experienced operating margin pressure. We are addressing both issues aggressively and are confident that we can achieve positive results."

About Argan

Argan is a publicly traded holding company focusing on companies that provide products and services to growth industries. Argan's primary business is designing and building energy plants for the rapidly growing alternative energy sector through its Gemma Power Systems subsidiary. Argan has two other subsidiaries: Southern Maryland Cable, Inc., which provides inside premise wiring services to the federal government including military installations and government office sites requiring high-level security clearance and also provides underground and aerial construction services and splicing to major telecommunications and utilities customers; and Vitarich Laboratories, a farm to market, vertically integrated private label manufacturer that manufactures, packages and distributes premium nutraceutical products, including nutritional and whole food dietary supplements and other personal healthcare products.

This press release contains forward-looking statements. The words or phrases "would be," "will allow," "intends to," "will likely result," "are expected to," "will continue," "is anticipated," "estimate," "project," or similar expressions are intended to identify "forward-looking statements." Argan's financial and operational results reflected above should not be construed by any means as representative of the current or future value of its common stock. All information set forth in this news release, except historical and factual information, represents forward-looking statements. This includes all statements about the Company's plans, beliefs, estimates and expectations. These statements are based on current estimates and projections, which involve certain risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements. These risks and uncertainties include issues related to: rapidly changing technology and evolving standards in the industries in which the Company and its subsidiaries operate; the ability to obtain sufficient funding to continue operations, maintain adequate cash flow, profitably exploit new business, license and sign new agreements; the unpredictable nature of consumer preferences; and other factors set forth in the Company's most recently filed annual report and registration statement. Readers are cautioned not to place undue reliance on these forward-looking statements, which reflect management's analysis only as of the date hereof. The Company undertakes no obligation to publicly revise these forward-looking statements to reflect events or circumstances that arise after the date hereof. Readers should carefully review the risks and uncertainties described in other documents that the Company files from time to time with the Securities and Exchange Commission.

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